Aes 10K 2010 PDF

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549
FORM 10-K
È ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the Fiscal Year Ended December 31, 2010
-OR-
‘ TRANSITION REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1-12291
The AES Corporation

(Exact name of registrant as specified in its charter)
Delaware 54 1163725
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4300 Wilson Boulevard Arlington, Virginia 22203

(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code: (703) 522-1315
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class Name of Each Exchange on Which Registered
Common Stock, par value $0.01 per share New York Stock Exchange
AES Trust III, $3.375 Trust Convertible Preferred Securities New York Stock Exchange
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the Registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes È No ‘
Indicate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15 (d) of the
Act. Yes ‘ No È
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and
(2) has been subject to such filing requirements for the past 90 days. Yes È No ‘
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files). Yes È No ‘
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be
contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this
Form 10-K or any amendment to this Form 10-K. È
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller
reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the
Exchange Act. (Check one):
Large accelerated filer È Accelerated filer ‘ Non-accelerated filer ‘ Smaller reporting company ‘
(Do not check if a smaller
reporting company)
Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ‘ No È
The aggregate market value of the voting and non-voting common equity held by non-affiliates on June 30, 2010, the last business day
of the Registrant’s most recently completed second fiscal quarter (based on the closing sale price of $9.24 of the Registrant’s Common
Stock, as reported by the New York Stock Exchange on such date) was approximately $7.350 billion.
The number of shares outstanding of the Registrant’s Common Stock, par value $0.01 per share, on February 23, 2011, was
788,253,071.
DOCUMENTS INCORPORATED BY REFERENCE
Portions of Registrant’s Proxy Statement for its 2011 annual meeting of stockholders are incorporated by reference in Parts II and III
THE AES CORPORATION
FISCAL YEAR 2010 FORM 10-K
TABLE OF CONTENTS
PART I . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ITEM 1. BUSINESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Our Organization and Segments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Customers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Executive Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
How to Contact AES and Sources of Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ITEM 1A. RISK FACTORS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
ITEM 2. PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ITEM 3. LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ITEM 4. REMOVED AND RESERVED . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
PART II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER
MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Sale of Unregistered Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
Purchases of Equity Securities by the Issuer and Affiliated Purchasers . . . . . . . . . . . . . . . . . . . . . . 108
Market Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
Holders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
ITEM 6. SELECTED FINANCIAL DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 111
ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Overview of Our Business . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
Performance Highlights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117
Non-GAAP Measures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
Consolidated Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
Critical Accounting Estimates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149
New Accounting Pronouncements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153
Capital Resources and Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
Off-Balance Sheet Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK . . . . . . . . . 165
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA . . . . . . . . . . . . . . . . . . . . . . . . . 168
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
ITEM 9A. CONTROLS AND PROCEDURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 277
ITEM 9B. OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
PART III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE . . . . . . . . . . . . 280
ITEM 11. EXECUTIVE COMPENSATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
AND RELATED STOCKHOLDER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 280
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS AND DIRECTOR
INDEPENDENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 282
PART IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES . . . . . . . . . . . . . . . . . . . . . . . . . . . 283
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 288
PART I
In this Annual Report the terms “AES,” “the Company,” “us,” or “we” refer to The AES Corporation and all
of its subsidiaries and affiliates, collectively. The term “The AES Corporation” and “Parent Company” refers
only to the parent, publicly-held holding company, The AES Corporation, excluding its subsidiaries and
affiliates.
FORWARD-LOOKING INFORMATION
In this filing we make statements concerning our expectations, beliefs, plans, objectives, goals, strategies,
and future events or performance. Such statements are “forward-looking statements” within the meaning of the
Private Securities Litigation Reform Act of 1995. Although we believe that these forward-looking statements and
the underlying assumptions are reasonable, we cannot assure you that they will prove to be correct.
Forward-looking statements involve a number of risks and uncertainties, and there are factors that could
cause actual results to differ materially from those expressed or implied in our forward-looking statements. Some
of those factors (in addition to others described elsewhere in this report and in subsequent securities filings)
include:
• the economic climate, particularly the state of the economy in the areas in which we operate, including
the fact that the global economy faces considerable uncertainty for the foreseeable future, which further
increases many of the risks discussed in this Form 10-K;
• changes in inflation, demand for power, interest rates and foreign currency exchange rates, including
our ability to hedge our interest rate and foreign currency risk;
• changes in the price of electricity at which our Generation businesses sell into the wholesale market
and our Utility businesses purchase to distribute to their customers, and the success of our risk
management practices, such as our ability to hedge our exposure to such market price risk;
• changes in the prices and availability of coal, gas and other fuels (including our ability to have fuel
transported to our facilities) and the success of our risk management practices, such as our ability to
hedge our exposure to such market price risk, and our ability to meet credit support requirements for
fuel and power supply contracts;
• changes in and access to the financial markets, particularly changes affecting the availability and cost
of capital in order to refinance existing debt and finance capital expenditures, acquisitions, investments
and other corporate purposes;
• our ability to manage liquidity and comply with covenants under our recourse and non-recourse debt,
including our ability to manage our significant liquidity needs and to comply with covenants under our
senior secured credit facility and other existing financing obligations;
• changes in our or any of our subsidiaries’ corporate credit ratings or the ratings of our or any of our
subsidiaries’ debt securities or preferred stock, and changes in the rating agencies’ ratings criteria;
• our ability to purchase and sell assets at attractive prices and on other attractive terms;
• our ability to compete in markets where we do business;
• our ability to manage our operation and maintenance costs;
• the performance and reliability of our generating plants, including our ability to reduce unscheduled
down-times;
• our ability to locate and acquire attractive “greenfield” projects and our ability to finance, construct and
begin operating our “greenfield” projects on schedule and within budget;
1
• our ability to enter into long-term contracts, which limit volatility in our results of operations and cash
flow, such as power purchase agreements, fuel supply, and other agreements and to manage
counterparty credit risks in these agreements;
• variations in weather, especially mild winters and cooler summers in the areas in which we operate,
low levels of wind or sunlight for our wind and solar businesses, and the occurrence of difficult
hydrological conditions for our hydro-power plants, as well as hurricanes and other storms and
disasters;
• our ability to meet our expectations in the development, construction, operation and performance of our
wind businesses, which rely, in part, on actual wind conditions and wind turbine performance being in
line with our expectations;
• the success of our initiatives in other renewable energy projects, as well as greenhouse gas emissions
reduction projects and energy storage projects;
• our ability to keep up with advances in technology;
• the potential effects of threatened or actual acts of terrorism and war;
• the expropriation or nationalization of our businesses or assets by foreign governments, whether with
or without adequate compensation;
• our ability to achieve expected rate increases in our Utility businesses;
• changes in laws, rules and regulations affecting our international businesses;
• changes in laws, rules and regulations affecting our North America business, including, but not limited
to, deregulation of wholesale power markets and its effects on competition, the ability to recover net
utility assets and other potential stranded costs by our utilities, the establishment of a regional
transmission organization that includes our utility service territory, the application of market power
criteria by the Federal Energy Regulatory Commission, changes in law resulting from new federal
energy legislation, including the effects of the repeal of Public Utility Holding Company Act of 1935,
and changes in political or regulatory oversight or incentives affecting our wind business, our solar
joint venture, our other renewables projects and our initiatives in greenhouse gas reductions and energy
storage including tax incentives;
• changes in environmental laws, including requirements for reduced emissions of sulfur, nitrogen,
carbon, mercury, coal ash, hazardous air pollutants and other substances, including potential
greenhouse gas legislation, regulation and/or treaties;
• changes in tax laws and the effects of our strategies to reduce tax payments;
• the effects of litigation and government and regulatory investigations;
• our ability to maintain adequate insurance;
• decreases in the value of pension plan assets, increases in pension plan expenses and our ability to fund
defined benefit pension and other post-retirement plans at our subsidiaries;
• losses on the sale or write-down of assets due to impairment events or changes in management intent
with regard to either holding or selling certain assets;
• changes in accounting standards, corporate governance and securities law requirements;
• our ability to maintain effective internal controls over financial reporting; and
• our ability to attract and retain talented directors, management and other personnel, including, but not
limited to, financial personnel in our foreign businesses that have extensive knowledge of accounting
principles generally accepted in the United States.
2
These factors in addition to others described elsewhere in this Form 10-K, including those described under
Item 1A.—Risk Factors, and in subsequent securities filings, should not be construed as a comprehensive listing
of factors that could cause results to vary from our forward looking information.
We undertake no obligation to publicly update or revise any forward-looking statements, whether as a result
of new information, future events, or otherwise. If one or more forward-looking statements are updated, no
inference should be drawn that additional updates will be made with respect to those or other forward-looking
statements.
ITEM 1. BUSINESS
Overview
We are a global power company. We own a portfolio of electricity generation and distribution businesses on
five continents in 28 countries, with total capacity of approximately 40,500 Megawatts (“MW”) and distribution
networks serving over 12 million people as of December 31, 2010. In addition, we have more than 2,000 MW
under construction in six countries. Our global workforce of approximately 29,000 people helps provide
electricity to people in diverse markets ranging from urban centers in the United States to remote villages in
India. We were incorporated in Delaware in 1981 and for three decades we have been committed to providing
safe and reliable energy.
We own and operate two primary types of businesses. The first is our Generation business, where we own
and/or operate power plants to generate and sell power to wholesale customers such as utilities and other
intermediaries. The second is our Utilities business, where we own and/or operate utilities to distribute, transmit
and sell electricity to end-user customers in the residential, commercial, industrial and governmental sectors
within a defined service area.
Our assets are diverse with respect to fuel source and type of market, which helps reduce certain types of
operating risk. Our portfolio employs a broad range of fuels, including coal, gas, fuel oil, biomass and renewable
sources such as hydroelectric power, wind and solar, which reduces the risks associated with dependence on any
one fuel source. Our presence in mature markets helps reduce the volatility associated with our businesses in
faster-growing emerging markets. In addition, our Generation portfolio is largely contracted, which reduces the
risk related to market prices of electricity and fuel. We also attempt to limit risk by hedging some of our interest
rate and commodity risk, and by matching the currency of most of our subsidiary debt to the revenue of the
underlying business. However, our business is still subject to these and other risks, which are further described in
Item 1A.—Risk Factors of this Form 10-K.
Our goal is to maximize value for our shareholders through continued focus on increasing the profitability
of our existing portfolio and increasing cash flow while managing our risk and employing rigorous capital
allocation. We will continue to seek prudent expansion of our traditional Generation and Utilities lines of
business, along with expansion of wind, solar and energy storage, through acquisitions or greenfield
developments. Portfolio management remains an area of focus through which we have sold and expect to
continue to sell or monetize a portion of certain businesses or assets when market values appear attractive.
Furthermore, we will continue to focus on improving our business operations and management processes,
including our internal controls over financial reporting.
Key Lines of Business

AES’ primary sources of revenue and gross margin today are from Generation and Utilities. These
businesses are distinguished by the nature of the customers, operational differences, cost structure, regulatory
environment and risk exposure. The breakout of revenue and gross margin between Generation and Utilities for
the years ended December 31, 2010, 2009 and 2008, respectively, is shown below. Operating results for
integrated utilities, which have both Generation and Utilities, are reflected in the Utilities amounts below.
3
Revenue
($ in billions)
$7.5
$7.4
$6.1
$9.1 $7.8 $7.8

Generation
Utilities
2010 2009 2008
Gross Margin
($ in billions)
$1.5
$1.3 $1.4
$2.4 $2.2
$2.1
Generation
Utilities(1)
2010 2009 2008

(1) Utilities gross margin includes the margin from generation businesses owned by the Company and from
whom the utility purchases energy.
Generation
We currently own or operate a generation portfolio of approximately 34,100 MW, excluding the generation
capabilities of our integrated utilities, consisting of 100 Generation facilities in 25 countries on five continents at
our generation businesses. We also have approximately 1,700 MW of capacity currently under construction in
four countries. We are a major power source in many countries, such as Panama where we are the largest
generator of electricity, and Chile, where AES Gener (“Gener”) is the second largest electricity generation
company in terms of capacity. Our Generation business uses a wide range of technologies and fuel types
including coal, combined-cycle gas turbines, hydroelectric power and biomass. Generation revenue was
$7.5 billion, $6.1 billion and $7.4 billion for the years ended December 31, 2010, 2009 and 2008, respectively.
Performance drivers for our Generation businesses include, among other factors, plant reliability, fuel costs,
power prices, volume and fixed-cost management. Growth in the Generation business is largely tied to securing
new power purchase agreements (“PPAs”), expanding capacity in our existing facilities and building or acquiring
new power plants.
4
The majority of the electricity produced by our Generation businesses is sold under long-term PPAs, to
wholesale customers. In 2010, approximately 64% of the revenue from our Generation business was from plants
that operate under PPAs of three years or longer for 75% or more of their output capacity. These businesses often
reduce their exposure to fuel supply risks by entering into long-term fuel supply contracts or fuel tolling
arrangements where the customer assumes full responsibility for purchasing and supplying the fuel to the power
plant. These long-term contractual agreements help reduce the volatility of our cash flows and earnings and also
reduce exposure to volatility in the market price for electricity and fuel; however, the amount of earnings and
cash flow predictability varies from business to business based on the degree to which its exposure is limited by
the contracts it has negotiated.
Our Generation businesses with long-term contracts face most of their competition from other utilities and
independent power producers (“IPPs”) prior to the execution of a power sales agreement during the development
phase of a project or upon expiration of an existing agreement. Once a project is operational, we traditionally
have faced limited competition due to the long-term nature of the generation contracts. However, as our existing
contracts expire, the introduction of new power markets has increased competition to attract new customers and
maintain our current customer base.
The balance of our Generation business sells power through competitive markets under short-term contracts,
directly in the spot market or, in some cases, at regulated prices. As a result, the cash flows and earnings
associated with these businesses are more sensitive to fluctuations in the market price for electricity, natural gas,
coal and other fuels. Competitive factors for these facilities include price, reliability, operational cost and third-
party credit requirements.
Utilities
AES utility businesses distribute power to over 12 million people in seven countries on five continents and
consist primarily of 14 companies owned or operated under management agreements, each of which operate in
defined service areas. These businesses also include 15 generation plants in two countries with generation
capacity totaling approximately 4,600 MW. These businesses have a variety of structures ranging from pure
distribution businesses to fully integrated utilities, which generate, transmit and distribute power. For instance,
our wholly owned subsidiary in the U.S., Indianapolis Power & Light (“IPL”), has the exclusive right to provide
retail services to approximately 470,000 customers in Indianapolis, Indiana. Eletropaulo Metropolitana
Electricidad de São Paulo S.A (“AES Eletropaulo” or “Eletropaulo”), serving the São Paulo metropolitan region
for over 100 years, has approximately six million customers and is the largest electricity distribution company in
Brazil in terms of revenue and electricity distributed. In Cameroon, we are the primary generator and distributor
of electricity and in El Salvador we provide distribution services to serve more than 77% of the country’s
electricity customers. Utilities revenue was $9.1 billion, $7.8 billion and $7.8 billion for the years ended
December 31, 2010, 2009 and 2008, respectively.
Performance drivers for Utilities include, but are not limited to, reliability of service, management of
working capital, negotiation of tariff adjustments, compliance with extensive regulatory requirements, and in
developing countries, reduction of commercial and technical losses. The results of operations of our Utilities
businesses are sensitive to changes in economic growth, regulations and variations in weather conditions in the
areas in which they operate.
Utilities face relatively little direct competition due to significant barriers to entry which are present in these
markets. In certain locations, our distribution businesses face increased competition as a result of changes in laws
and regulations which allow wholesale and retail services to be provided on a competitive basis. Competition is a
factor in efforts to acquire existing businesses. In this arena, we compete against a number of other market
participants, some of which have greater financial resources, have been engaged in distribution related businesses
for longer periods of time and/or have accumulated more significant portfolios. Relevant competitive factors for
our power distribution businesses include financial resources, governmental assistance, regulatory restrictions
and access to non-recourse financing.
5
Renewables and Other Initiatives
In recent years, as demand for renewable sources of energy has grown, we have placed increasing emphasis on
developing projects in wind, solar and other renewable initiatives including energy storage. In 2005, we started a
wind generation business (“AES Wind Generation”), which currently has 20 plants in operation in five countries
totaling approximately 1,800 MW in generation capacity and is one of the largest producers of wind power in the
U.S. In addition, 264 MW are under construction in four countries. In March 2008, we formed AES Solar
Energy LLC (“AES Solar”), a joint venture with Riverstone Holdings, LLC (“Riverstone”), a private equity firm,
which has since commenced commercial operations of nine plants totaling 37 MW of solar projects in France,
Greece and Spain. We have a few projects producing GHG credits in Asia, Europe and Latin America. We also
have a line of business to develop and implement utility scale energy storage systems (such as batteries), which
store and release power when needed. While none of these initiatives are currently material to our operations, we
believe that as these businesses grow, they may become a material contributor to our operations. However, there are
risks associated with these initiatives, which are further described in Item 1A.—Risk Factors of this Form 10-K. As
further described in “Our Organization and Segments” below, some of these projects are managed within the region
in which they are located, while others are managed as separate business units and reported as set forth below.
Risks
We routinely encounter and address risks, some of which may cause our future results to be different,
sometimes materially different, than we presently anticipate. The categories of risk we have identified in
Item 1A.—Risk Factors of this Form 10-K include the following:
• risks associated with our disclosure controls and internal controls over financial reporting;
• risks related to our high level of indebtedness;
• risks associated with our ability to raise needed capital;
• external risks associated with revenue and earnings volatility;
• risks associated with our operations; and
• risks associated with governmental regulation and laws.
The categories of risk identified above are discussed in greater detail in Item 1A.—Risk Factors of this
Form 10-K. These risk factors should be read in conjunction with Item 7.—Management’s Discussion and
Analysis of Financial Condition and Results of Operations, and the Consolidated Financial Statements and
related notes included elsewhere in this report.
Our Organization and Segments

We believe our broad geographic footprint allows us to focus development in targeted markets with
opportunities for new investment, and provides stability through our presence in more developed regions. In
addition, our presence in each region affords us important relationships and helps us identify local markets with
attractive opportunities for new investment. As a result, we have structured our organization into geographic
regions, and each region is led by a regional president or other senior executive responsible for managing those
businesses. The regional presidents report to our Chief Operating Officer (“COO”), who in turn reports to our
Chief Executive Officer (“CEO”). Both our CEO and COO are based in Arlington, Virginia.
The Company’s segment reporting structure is organized along our two lines of business (Generation and
Utilities) and three regions: (1) Latin America & Africa; (2) North America; and (3) Europe, Middle East & Asia
(collectively, “EMEA”), which reflects how we manage the business internally. Additionally, AES Wind
Generation is managed within our North America region. For financial reporting purposes, the Company has six
reportable segments which include:
• Latin America—Generation;
• Latin America—Utilities;
6
• North America—Generation;
• North America—Utilities;
• Europe—Generation;
• Asia—Generation.
Corporate and Other—The Company’s Europe Utilities, Africa Utilities, Africa Generation and AES Wind
Generation businesses as well as the Company’s renewables initiatives are reported within “Corporate and
Other” because they do not require separate disclosure under segment reporting accounting guidance. See
Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations for further
discussion of the Company’s segment structure used for financial reporting purposes.
The following describes our businesses as they are aligned in our segment reporting structure for financial
reporting purposes.
Latin America
Our Latin America operations accounted for 69%, 70% and 68% of consolidated AES revenue in 2010,
2009 and 2008, respectively. The following table provides highlights of our Latin America operations:
Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Argentina, Brazil, Chile, Colombia, Dominican

Republic, El Salvador and Panama
Generation Capacity . . . . . . . . . . . . . . . . . . . . . . . 11,907 Gross MW
Utilities Penetration . . . . . . . . . . . . . . . . . . . . . . . 8.6 million customers (49,280 Gigawatt Hours
(“GWh”))
Generation Facilities . . . . . . . . . . . . . . . . . . . . . . 55 (including 3 under construction)
Utilities Businesses . . . . . . . . . . . . . . . . . . . . . . . 8
Key Generation Businesses . . . . . . . . . . . . . . . . . Gener, Tietê and Alicura
Key Utilities Businesses . . . . . . . . . . . . . . . . . . . . Eletropaulo and Sul
The graph below shows the breakdown between our Latin America Generation and Utilities segments as a
percentage of total Latin America revenue and gross margin for the years ended December 31, 2010, 2009, and
2008. See Note 15—Segment and Geographic Information in the Consolidated Financial Statements in Item 8 of
this Form 10-K for information on revenue from external customers, Adjusted Gross Margin (a non-GAAP
measure) and total assets by segment.
Revenue Gross Margin

($ in billions) ($ in billions)
$4.3
$3.7 $4.5
$1.5
$1.4 $1.4
$7.2
$6.1 $5.9
Generation Generation $1.1 $0.9 $0.9
Utilities Utilities
2010 2009 2008 2010 2009 2008
Latin America Generation. Our largest generation business in Latin America, AES Tietê (“Tietê”), located
in Brazil, represents approximately 18% of the total generation capacity in the state of São Paulo and is the tenth
largest generator in Brazil. AES holds a 24% economic interest in Tietê. In Argentina, we are the third largest
7
private power generator contributing 11% of the country’s total power generation capacity. In Chile, we are the
second largest generator of power. We currently have three new generation plants under construction—two coal
plants in Chile and one hydro plant in Panama with a combined generation capacity of 1,011 MW.
Set forth below is a list of our Latin America Generation facilities:
Generation
AES Equity Year

Interest Acquired
Gross (Percent, or Began
Business Location Fuel MW Rounded) Operation
Alicura . . . . . . . . . . . . . . . . . . . . . Argentina Hydro 1,050 99% 2000
Central Dique . . . . . . . . . . . . . . . . Argentina Gas/Diesel 68 51% 1998
Gener—TermoAndes . . . . . . . . . . Argentina Gas/Diesel 643 71% 2000
Los Caracoles(1) . . . . . . . . . . . . . . . Argentina Hydro 125 0% 2009
Paraná-GT . . . . . . . . . . . . . . . . . . . Argentina Gas/Diesel 845 99% 2001
Quebrada de Ullum(1) . . . . . . . . . . Argentina Hydro 45 0% 2004
Rio Juramento—Cabra Corral . . . Argentina Hydro 102 99% 1995
Rio Juramento—El Tunal . . . . . . . Argentina Hydro 10 99% 1995
San Juan—Sarmiento . . . . . . . . . . Argentina Gas/Diesel 33 99% 1996
San Juan—Ullum . . . . . . . . . . . . . Argentina Hydro 45 99% 1996
San Nicolás . . . . . . . . . . . . . . . . . . Argentina Coal/Gas/Oil 675 99% 1993
Tietê(2) . . . . . . . . . . . . . . . . . . . . . . Brazil Hydro 2,657 24% 1999
Uruguaiana . . . . . . . . . . . . . . . . . . Brazil Gas 639 46% 2000
Gener—Electrica Santiago(3) . . . . . Chile Gas/Diesel 479 64% 2000
Gener—Electrica Ventanas(4) . . . . Chile Coal 272 71% 2010
Gener—Energía Verde(5) . . . . . . . . Chile Biomass/Diesel 49 71% 2000
Gener—Gener(6) . . . . . . . . . . . . . . . Chile Hydro/Coal/Diesel 953 71% 2000
Gener—Guacolda(7),(8) . . . . . . . . . . Chile Coal/Pet Coke 608 35% 2000
Gener—Norgener . . . . . . . . . . . . . Chile Coal/Pet Coke 277 71% 2000
Chivor . . . . . . . . . . . . . . . . . . . . . . Colombia Hydro 1,000 71% 2000
Andres . . . . . . . . . . . . . . . . . . . . . . Dominican Republic Gas 319 100% 2003
Itabo(9) . . . . . . . . . . . . . . . . . . . . . . Dominican Republic Coal 295 50% 2000
Los Mina . . . . . . . . . . . . . . . . . . . . Dominican Republic Gas 236 100% 1996
Bayano . . . . . . . . . . . . . . . . . . . . . Panama Hydro 260 49% 1999
Chiriqui—Esti . . . . . . . . . . . . . . . Panama Hydro 120 49% 2003
Chiriqui—La Estrella . . . . . . . . . . Panama Hydro 48 49% 1999
Chiriqui—Los Valles . . . . . . . . . . Panama Hydro 54 49% 1999
11,907
(1) AES operates these facilities through management or operations and maintenance (“O&M”) agreements and
owns no equity interest in these businesses.
(2) Tietê plants: Água Vermelha, Bariri, Barra Bonita, Caconde, Euclides da Cunha, Ibitinga, Limoeiro,
Mog-Guaçu, Nova Avanhandava, Promissão and seven other small hydroelectric plants below Tietê’s
wholly-owned subsidiary “PCH Minas Ltda”.
(3) Gener—Electrica Santiago plants: Nueva Renca and Renca.
(4) Gener—Electrica Ventanas plant: Nueva Ventanas.
(5) Gener—Energia Verde Plants: Constitución, Laja and San Francisco de Mostazal.
(6) Gener—Gener plants: Alfalfal, Laguna Verde, Laguna Verde Turbogas, Los Vientos, Maitenas, Queltehues,
Santa Lidia, Ventanas and Volcán.
(7) Gener—Guacolda plants: Guacolda 1, Guacolda 2, Guacolda 3 and Guacolda 4.
(8) Unconsolidated entities, the results of operations of which are reflected in Equity in Earnings of Affiliates.
(9) Itabo plants: Itabo complex (two coal-fired steam turbines and one gas-fired steam turbine).
8
Generation under construction
AES Equity Expected
Interest Year of
Gross (Percent, Commercial
Business Location Fuel MW Rounded) Operations
Angamos . . . . . . . . . . . . . . . . . . . . Chile Coal 518 71% 2011

Campiche . . . . . . . . . . . . . . . . . . . Chile Coal 270 71% 2013
Changuinola I . . . . . . . . . . . . . . . . Panama Hydro 223 100% 2011
1,011
Latin America Utilities. Each of our Utilities businesses in Latin America sells electricity under regulated
tariff agreements and has transmission and distribution capabilities but none of them has generation capability.
AES Eletropaulo, a consolidated subsidiary of which AES owns a 16% economic interest and which has served
the São Paulo, Brazil area for over 100 years, has approximately six million customers and is the largest
electricity distribution company in Brazil in terms of revenue and electricity distributed. Pursuant to its
concession agreement, AES Eletropaulo is entitled to distribute electricity in its service area until 2028. AES
Eletropaulo’s service territory consists of 24 municipalities in the greater São Paulo metropolitan area and
adjacent regions that account for approximately 17% of Brazil’s GDP and 40% of the population in the State of
São Paulo. AES Sul (“Sul”), a wholly-owned subsidiary, serves over one million customers. In El Salvador, our
Utilities businesses provide electricity to over 81% of the country, serving more than one million customers.
Set forth below is a list of our Latin America Utilities facilities:
Distribution
Approximate
Number of AES Equity
Customers GWh Interest
Served as of Sold in (Percent, Year
Business Location 12/31/2010 2010 Rounded) Acquired
Edelap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Argentina 329,000 2,776 90% 1998

Edes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Argentina 172,000 894 90% 1997
Eletropaulo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil 5,832,000 33,860 16% 1998
Sul . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil 1,181,474 8,320 100% 1997
CAESS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . El Salvador 516,000 2,060 75% 2000
CLESA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . El Salvador 304,000 786 64% 1998
DEUSEM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . El Salvador 62,000 108 74% 2000
EEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . El Salvador 229,000 476 89% 2000
8,625,474 49,280
North America
Our North America operations accounted for 19%, 22% and 22% of consolidated revenue in 2010, 2009 and
2008, respectively. The following table provides highlights of our North America operations:
Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.S., Puerto Rico and Mexico

Utilities Penetration . . . . . . . . . . . . . . . . . . . . . . . 470,000 customers (16,537 GWh)
Generation Facilities . . . . . . . . . . . . . . . . . . . . . . 19
Utilities Businesses . . . . . . . . . . . . . . . . . . . . . . . 1 integrated utility (includes 4 generation
plants)
Key Generation Businesses . . . . . . . . . . . . . . . . . Eastern Energy, Southland and TEG/TEP
Key Utilities Business . . . . . . . . . . . . . . . . . . . . . IPL
9
The graph below shows the breakdown between our North America Generation and Utilities segments as a
percentage of total North America revenue and gross margin for the years ended December 31, 2010, 2009 and
2008. See Note 15—Segment and Geographic Information in the Consolidated Financial Statements in Item 8 of
this Form 10-K for information on revenue from external customers, Adjusted Gross Margin (a non-GAAP
measure) and total assets by segment.
Revenue Gross Margin

($ in billions) ($ in millions)
$2.0 $2.2
$1.9 $660
$435 $477
Generation Generation
$1.1 $1.1 $1.1 $261
$249 $239
Utilities Utilities
2010 2009 2008 2010 2009 2008
North America Generation. Approximately 86% of the generation capacity is supported by long-term power
purchase or tolling agreements. Our North America Generation business consists of six gas-fired, ten coal-fired
and three petroleum coke-fired plants in the United States, Puerto Rico and Mexico.
Our largest generation business is AES Southland. This business operates three gas-fired plants,
representing generation capacity of 4,327 MW, in the Los Angeles basin under a long-term tolling agreement. In
addition, in the Western New York power market, AES Eastern Energy operates four of our coal-fired plants,
Cayuga, Greenidge, Somerset and Westover, representing generation capacity of 1,169 MW, providing power to
this market under short-term contracts, as well as in the spot electricity market.
10
Set forth below is a list of our North America Generation facilities:
Generation
AES Equity Year

Ownership Acquired
Mérida III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mexico Gas 484 55% 2000

Termoelectrica del Golfo (TEG) . . . . . . . . . . . . . . . . . . Mexico Pet Coke 230 99% 2007
Termoelectrica del Peñoles (TEP) . . . . . . . . . . . . . . . . Mexico Pet Coke 230 99% 2007
Southland—Alamitos . . . . . . . . . . . . . . . . . . . . . . . . . . USA—CA Gas 2,047 100% 1998
Southland—Huntington Beach . . . . . . . . . . . . . . . . . . . USA—CA Gas 904 100% 1998
Southland—Redondo Beach . . . . . . . . . . . . . . . . . . . . . USA—CA Gas 1,376 100% 1998
Thames . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—CT Coal 208 100% 1990
Hawaii . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—HI Coal 203 100% 1992
Warrior Run . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—MD Coal 205 100% 2000
Red Oak . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—NJ Gas 832 100% 2002
Cayuga . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—NY Coal 306 100% 1999
Greenidge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—NY Coal 106 100% 1999
Somerset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—NY Coal 675 100% 1999
Westover . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—NY Coal 82 100% 1999
Shady Point . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—OK Coal 360 100% 1991
Beaver Valley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—PA Coal 125 100% 1985
Ironwood . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—PA Gas 710 100% 2001
Puerto Rico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—PR Coal 454 100% 2002
Deepwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—TX Pet Coke 160 100% 1986
9,697
North America Utilities. AES has one integrated utility in North America, IPL, which it owns through
IPALCO Enterprises Inc. (“IPALCO”), the parent holding company of IPL. IPL generates, transmits, distributes
and sells electricity to approximately 470,000 customers in the city of Indianapolis and neighboring areas within
the state of Indiana. IPL owns and operates four generation facilities that provide more than 96% of the
electricity it distributes. Two of the generation facilities are coal-fired plants. The third facility has a combination
of units that use coal (base load capacity) and natural gas and/or oil (peaking capacity). The fourth facility is a
small peaking station that uses gas-fired combustion turbine technology. IPL’s gross generation capacity is 3,699
MW. Approximately 45% of IPL’s coal is provided by one supplier with which IPL has long-term contracts. A
key driver for the business is tariff recovery for environmental projects through the rate adjustment process.
IPL’s customers include residential, industrial, commercial and all other which made up 37%, 40%, 15% and
8%, respectively, of North America Utilities revenue for 2010.
IPL’s generation facilities
AES Equity Year

Interest Acquired
IPL(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—IN Coal/Gas/Oil 3,699 100% 2001

(1) IPL plants: Eagle Valley, Georgetown, Harding Street and Petersburg.
11
Distribution
Approximate
IPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—IN 470,000 16,537 100% 2001
Europe
The following table provides highlights of our Europe operations:
Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Czech Republic, Hungary, Jordan, Kazakhstan,

Netherlands, Spain, Turkey, Ukraine and the
United Kingdom
Utilities Penetration . . . . . . . . . . . . . . . . . . . . . . . 1.8 million customers (9,904 GWh)
Generation Facilities . . . . . . . . . . . . . . . . . . . . . . 21 (including 3 under construction)
Utilities Businesses . . . . . . . . . . . . . . . . . . . . . . . 4
Key Generation Businesses . . . . . . . . . . . . . . . . . Ballylumford, Cartagena, Kilroot, Tisza II
Key Utilities Businesses . . . . . . . . . . . . . . . . . . . . Kievoblenergo and Rivneenergo
Our Utilities operations in Europe are discussed further under Corporate and Other below.
Europe Generation. Our Generation operations in Europe accounted for 8%, 6% and 8% of our consolidated
revenue in 2010, 2009 and 2008, respectively. In 2007, we began commercial operation of AES Cartagena
(“Cartagena”), our first power plant in Spain, with capacity of 1,199 MW. As a result of the new accounting
guidance for variable interest entities, the Company consolidated Cartagena effective January 1, 2010. In prior
periods, the results of operations for Cartagena were included in the Equity in Earnings of Affiliates line item on
the Consolidated Statements of Operations. Today, AES operates four power plants in Kazakhstan which account
for 8% of the country’s total installed generation capacity. In September 2009, AES completed construction and
launched commercial operation of the 380 MW combined-cycle Amman East power plant in Jordan. See
Note 15—Segment and Geographic Information in the Consolidated Financial Statements in Item 8 of this
Form 10-K for revenue, Adjusted Gross Margin (a non-GAAP measure) and total assets by segment. Key
business drivers of this segment are: foreign currency exchange rates, new legislation and regulations including
those related to the environment.
12
Set forth below is a list of our Europe Generation facilities:
Generation
AES Equity Year

Interest Acquired
Bohemia . . . . . . . . . . . . . . . . . . . . . . . . . . . . Czech Republic Coal/Biomass 50 100% 2001

Borsod . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hungary Biomass/Coal 71 100% 1996
Tisza II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Hungary Gas/Oil 900 100% 1996
Tiszapalkonya . . . . . . . . . . . . . . . . . . . . . . . . Hungary Coal/Biomass 90 100% 1996
Amman East . . . . . . . . . . . . . . . . . . . . . . . . . Jordan Gas 380 37% 2008
Shulbinsk HPP(1) . . . . . . . . . . . . . . . . . . . . . . Kazakhstan Hydro 702 0% 1997
Sogrinsk CHP . . . . . . . . . . . . . . . . . . . . . . . . Kazakhstan Coal 301 100% 1997
Ust—Kamenogorsk HPP(1) . . . . . . . . . . . . . . Kazakhstan Hydro 331 0% 1997
Ust—Kamenogorsk CHP . . . . . . . . . . . . . . . Kazakhstan Coal 1,354 100% 1997
Elsta(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Netherlands Gas 630 50% 1998
Cartagena . . . . . . . . . . . . . . . . . . . . . . . . . . . Spain Gas 1,199 71% 2006
Damlapinar(2)(3) . . . . . . . . . . . . . . . . . . . . . . . Turkey Hydro 16 51% 2010
Girlevik II-Mercan(2) . . . . . . . . . . . . . . . . . . . Turkey Hydro 12 51% 2007
Kepezkaya(2)(3) . . . . . . . . . . . . . . . . . . . . . . . . Turkey Hydro 28 51% 2010
Yukari-Mercan(2) . . . . . . . . . . . . . . . . . . . . . . Turkey Hydro 14 51% 2007
Ballylumford . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom Natural Gas 1,246 100% 2010
Kilroot(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom Coal/Gas/Oil 662 99% 1992
7,986
(1) AES operates these facilities under concession agreements until 2017.
(3) Joint Venture with I.C. Energy.
(4) Includes Kilroot Open Cycle Gas Turbine (“OCGT”).
Generation under construction
AES Equity Expected

Interest Year of
Gross (Percent, Commercial
Maritza East(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bulgaria Coal 670 100% 2011

Kumkoy(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Turkey Hydro 18 51% 2011
Niksar(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Turkey Hydro 40 51% 2011
728
(1) Construction of the Maritza East facility is currently on hold. For further discussion please see Item 7.—
Management’s Discussion and Analysis—Key Trends and Uncertainties and Item 1A.—Risk Factors, “Our
business is subject to substantial development uncertainties.”
(2) Joint Venture with I.C. Energy. The joint venture is an unconsolidated entity, the results of operations of
which are reflected in Equity in Earnings of Affiliates.
13
Asia
Our Asia operations accounted for 4%, 3% and 2% of consolidated revenue in 2010, 2009 and 2008,
respectively. Asia’s Generation business operates 9 power plants with a total capacity of 4,103 MW in four
countries. In Asia, AES operates generation facilities only. See Note 15—Segment and Geographic Information
in the Consolidated Financial Statements in Item 8 of this Form 10-K for revenue, Adjusted Gross Margin (a
non-GAAP measure) and total assets by segment. The following table provides highlights of our Asia operations:
Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China, India, the Philippines and Sri Lanka

Utilities Penetration . . . . . . . . . . . . . . . . . . . . . . . None
Generation Facilities . . . . . . . . . . . . . . . . . . . . . . 9
Utilities Businesses . . . . . . . . . . . . . . . . . . . . . . . None
Key Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . Yangcheng and Masinloc
Asia Generation. In 2010, the Company closed the sales of our businesses in Oman, Pakistan and Qatar. See
Note 21—Discontinued Operations and Held for Sale Businesses in Item 8 of this Form 10-K for further
information on these sales. More than half of our remaining generation capacity in Asia is located in China. In
1996, AES joined with Chinese partners to build Yangcheng, the first “coal-by-wire” power plant with the
generation capacity of 2,100 MW. In April 2008, the Company completed the purchase of a 92% interest in a
660 MW coal-fired thermal power generation facility in Masinloc, Philippines (“Masinloc”).
Set forth below is a list of our generation facilities in Asia:
Generation
AES Equity Year

Interest Acquired
Aixi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Coal 51 71% 1998

Chengdu(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Gas 50 35% 1997
Cili . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Hydro 25 51% 1994
JHRH(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Hydro 379 35% 2010
Wuhu(1),(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Coal 250 25% 1996
Yangcheng(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Coal 2,100 25% 2001
OPGC(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India Coal 420 49% 1998
Masinloc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Philippines Coal 660 92% 2008
Kelanitissa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Sri Lanka Diesel 168 90% 2003
4,103
(2) AES agreed to sell its 25% equity interest in this business on August 11, 2010. The disposal was approved
by the government authority on December 6, 2010.
Corporate and Other

“Corporate and Other” includes the net operating results from our Utilities businesses in Africa and Europe,
Africa Generation and AES Wind Generation and other renewables projects. These operations do not require
separate segment disclosure. The following provides additional details about our Utilities businesses in Africa
and Europe, Africa generation and AES Wind Generation, which are reported within “Corporate and Other” for
financial reporting purposes.
14
Europe Utilities. Our distribution businesses in the Ukraine and Kazakhstan together serve approximately
1.8 million customers.
Distribution
Approximate
Eastern Kazakhstan REC(1)(2) . . . . . . . . . . . . . . . . . . . . Kazakhstan 459,000 3,444 0%

Ust-Kamenogorsk Heat Nets(1)(3) . . . . . . . . . . . . . . . . . Kazakhstan 96,000 — 0%
Kievoblenergo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ukraine 861,828 4,557 89% 2001
Rivneenergo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Ukraine 405,934 1,903 84% 2001
1,822,762 9,904
(1) AES operates these businesses through management agreements and owns no equity interest in these
businesses.
(2) Shygys Energo Trade, a retail electricity company, is 100% owned by Eastern Kazakhstan REC (“EK
REC”) and purchases distribution service from EK REC and electricity in the wholesale electricity market
and resells to the distribution customers of EK REC.
(3) Ust-Kamenogorsk Heat Nets provide transmission and distribution of heat with a total heat generating
capacity of 224 Gcal.
Africa Utilities. AES owns a 56% interest in an integrated utility, Société Nationale d’Electricité (“Sonel”).
Sonel generates, transmits and distributes electricity to over half a million people and is the sole distributor of
electricity in Cameroon.
Set forth below is a list of the generation and distribution facilities of Sonel:
Sonel’s generation facilities
AES Equity Year

Interest Acquired
Sonel(1) . . . . . . . . . . . . . . . . . . . . . . . Cameroon Hydro/ Diesel/Heavy Fuel Oil 936 56% 2001

(1) Sonel plants: Bafoussam, Bassa, Djamboutou, Edéa, Lagdo, Limbé, Logbaba I, Logbaba II, Oyomabang I,
Oyomabang II, Song Loulou, and other small remote network units.
Sonel’s distribution facility
Approximate
Sonel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cameroon 660,484 3,345 56% 2001
15
Africa Generation. Set forth below is a list of our generation facilities in Africa.
Generation
AES Equity Year

Interest Acquired
Dibamba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cameroon Heavy Fuel Oil 86 56% 2009

Ebute . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Nigeria Gas 294 95% 2001
380
Wind Generation. We own and operate 1,538 MW of wind generation capacity and operate an additional
215 MW of capacity through operating and management agreements. Our wind business is located primarily in
North America where we operate wind generation facilities that have generation capacity of 1,269 MW.
Set forth below is a list of AES Wind Generation facilities:
Generation
AES Equity Year

Interest Acquired or
Power Gross (Percent, Began
Business Location Source MW Rounded) Operation
St. Nikola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bulgaria Wind 156 89% 2010

Dong Qi(1),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Wind 49 49% 2010
Huanghua I(1),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Wind 49 49% 2009
Huanghua II(1),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Wind 49 49% 2010
Hulunbeier(1),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Wind 49 49% 2008
InnoVent(2),(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France Wind 75 40% 2003-2009
St. Patrick . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France Wind 35 100% 2010
North Rhins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Scotland Wind 22 100% 2010
Altamont . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—CA Wind 40 100% 2005
Mountain View I & II(4) . . . . . . . . . . . . . . . . . . . . . . . . . . USA—CA Wind 67 100% 2008
Palm Springs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—CA Wind 30 100% 2005
Tehachapi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—CA Wind 58 100% 2007
Storm Lake II(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—IA Wind 78 100% 2007
Lake Benton I(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—MN Wind 106 100% 2007
Condon(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—OR Wind 50 100% 2005
Armenia Mountain(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—PA Wind 101 100% 2009
Buffalo Gap I(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—TX Wind 121 100% 2006
Buffalo Gap II(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—TX Wind 233 100% 2007
Buffalo Gap III(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—TX Wind 170 100% 2008
Wind generation facilities(5) . . . . . . . . . . . . . . . . . . . . . . . USA Wind 215 0% 2005
1,753
(1) Joint Venture with Guohua Energy Investment Co. Ltd.

(2) InnoVent plants: Bignan, Chepy, Croixrault-Moyencourt, Frenouville, Gapree, Grand Fougeray, Guehenno,
Hargicourt, Hescamps, LePortal, Les Diagots, Nibas, Plechatel, Saint-Hilaire la Croix and Valhoun.
InnoVent owns various percentages of underlying projects.
16
(4) AES owns these assets together with third party tax equity investors with variable ownership interests. The
tax equity investors receive a portion of the economic attributes of the facilities, including tax attributes that
vary over the life of the projects. The proceeds from the issuance of tax equity are recorded as
Noncontrolling Interest in the Company’s Consolidated Balance Sheets.
(5) AES operates these facilities through management or O&M agreements and owns no equity interest in these
businesses.
AES Wind Generation projects under construction
AES Equity Expected

Interest Year of
Power Gross (Percent, Commercial
Business Location Source MW Rounded) Operation
Chen Qi(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Wind 49 49% 2011

InnoVent(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France Wind 29 40% 2011
Saurashtra . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India Wind 39 100% 2011
Mountain View IV . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US-CA Wind 49 100% 2011
Laurel Mountain . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . US-WV Wind 98 100% 2011
264
(1) Joint Venture with Guohua Energy Investment Co. Ltd.

(2) InnoVent plants: Allery, Audrieu, Lamballe, Lefaux and Vron. InnoVent owns various percentages of
underlying projects.
Other. AES Solar and certain other unconsolidated businesses are accounted for using the equity method of
accounting. Therefore, their operating results are included in “Net Equity in Earnings of Affiliates” on the face of
the Consolidated Statements of Operations, not in revenue and gross margin. AES Solar was formed in March
2008 to develop, own and operate solar installations. Since its launch, AES Solar has commenced commercial
operations of 37 MW of solar projects in France, Greece and Spain, has 75 MW under construction in Italy, and
has development potential in Bulgaria, India and the U.S.
“Corporate and Other” also includes general and administrative expenses related to corporate staff functions
and initiatives, executive management, business development, finance, legal, human resources and information
systems which are not allocable to our business segments and the effects of eliminating transactions, such as self
insurance charges, between the operating segments and corporate. See Note 15—Segment and Geographic
Information in the Consolidated Financial Statements in Item 8 of this Form 10-K for information on revenue
from external customers, Adjusted Gross Margin (a non-GAAP measure) and total assets by segment.
17
Financial Data by Country
The table below presents information, by country, about our consolidated operations for each of the three
years ended December 31, 2010, 2009 and 2008, respectively, and property, plant and equipment as of
December 31, 2010 and 2009, respectively. Revenue is recognized in the country in which it is earned and assets
are reflected in the country in which they are located.
Revenue Property, Plant & Equipment, net

2010 2009 2008 2010 2009
(in millions)
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,615 $ 2,545 $ 2,745 $ 6,167 $ 7,016
Non-U.S.:
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,473 5,394 5,501 6,413 5,799
Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,355 1,239 1,349 2,560 2,321
Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887 684 949 459 448
El Salvador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648 619 484 261 254
Dominican Republic . . . . . . . . . . . . . . . . . . . . . . . 535 429 601 625 634
Philippines(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 250 148 784 765
Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 370 379 823 742
Spain(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 — — 667 —
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 329 463 786 802
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393 347 291 387 390
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . 385 241 342 527 433
Ukraine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 286 403 86 80
Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 317 466 80 196
Puerto Rico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 267 251 596 609
Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 168 210 921 834
Kazakhstan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 123 234 63 48
Jordan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 104 47 224 231
Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 109 184 69 74
Bulgaria(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 — — 1,825 1,835
Qatar(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
Pakistan(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
Oman(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
Other Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 133 150 298 285
Total Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,032 11,409 12,452 18,454 16,780
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,647 $13,954 $15,197 $24,621 $23,796
(1) Masinloc was acquired in April 2008; 2008 revenue represents results for a partial year.
(2) Cartagena was consolidated effective January 1, 2010 upon implementation of the variable interest entity
accounting guidance.
(3) Maritza East and our wind project in Bulgaria were under development and therefore not operational as of
December 31, 2009. Our wind project in Bulgaria started operations in 2010.
(4) Excludes revenue of $129 million, $163 million and $161 million for the years ended December 31, 2010,
2009 and 2008, respectively, and property, plant and equipment of $501 million as of December 31, 2009
related to Ras Laffan, which was reflected as discontinued operations and businesses held for sale in the
accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.
related to Lal Pir and Pak Gen, which were reflected as discontinued operations and businesses held for sale
in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.
18
2009 and 2008, respectively, and property, plant and equipment of $311 million as of December 31, 2009,
related to Barka, which was reflected as discontinued operations and businesses held for sale in the
Customers
We sell to a wide variety of customers. No individual customer accounted for 10% or more of our 2010 total
revenue. In our generation business, we own and/or operate power plants to generate and sell power to wholesale
customers such as utilities and other intermediaries. Our utilities sell to end-user customers in the residential,
commercial, industrial and governmental sectors in a defined service area.
Employees
As of December 31, 2010, we employed approximately 29,000 people.
Executive Officers
The following individuals are our executive officers:
Paul Hanrahan, 53 years old, has been the President, CEO and a member of our Board of Directors since
2002. Prior to assuming his current position, Mr. Hanrahan was the Executive Vice President and COO. In this
role, he was responsible for managing all aspects of business development activities and the operation of multiple
electric utilities and generation facilities in Europe, Asia and Latin America. Mr. Hanrahan was previously the
President and CEO of the AES China Generating Company, Ltd., a public company formerly listed on
NASDAQ. Mr. Hanrahan also has managed other AES businesses in the United States, Europe and Asia. In
March 2006, he was elected to the board of directors of Corn Products International, Inc. Prior to joining AES,
Mr. Hanrahan served as a line officer on the U.S. fast attack nuclear submarine, USS Parche (SSN-683).
Mr. Hanrahan is a graduate of Harvard Business School and the U.S. Naval Academy.
Andres R. Gluski, 53 years old, has been an Executive Vice President and COO of the Company since
March 2007. Prior to becoming the COO of AES, Mr. Gluski was Executive Vice President and the Regional
President of Latin America from 2006 to 2007. Mr. Gluski was Senior Vice President for the Caribbean and
Central America from 2003 to 2006, CEO of La Electricidad de Caracas (“EDC”) from 2002 to 2003 and CEO of
AES Gener (Chile) in 2001. Prior to joining AES in 2000, Mr. Gluski was Executive Vice President and CFO of
EDC, Executive Vice President of Banco de Venezuela (Grupo Santander), Vice President for Santander
Investment, and Executive Vice President and CFO of CANTV (subsidiary of GTE). Mr. Gluski has also worked
with the International Monetary Fund in the Treasury and Latin American Departments and served as Director
General of the Ministry of Finance of Venezuela. Mr. Gluski currently serves on the Board of Directors of Cliffs
Natural Resources, The Council of Americas, US Spain Business Council and The Edison Electric Institute and
is Chairman of AES Gener and AES Brasiliana. Mr. Gluski is a graduate of Wake Forest University and holds an
M.A and a Ph.D in Economics from the University of Virginia.
Ned Hall, 51 years old, has been an Executive Vice President, Regional President for North America and
Chairman, Global Wind Generation and Energy Storage since June 2008. In August of 2009, Mr. Hall joined the
Board of AES Solar Energy, Ltd., a joint venture between AES and Riverstone Holdings LLC. Prior to his
current position, Mr. Hall was Vice President of the Company and President, Global Wind Generation from April
2005 to June 2008, Managing Director of AES Global Development from September 2003 to April 2005, and
was an AES Group Manager from April 2001 to September 2003. Mr. Hall joined AES in 1988 as a Project
Manager working in the Development Group and has held a variety of development and operating roles for AES,
including assignments in the U.S., Europe, Asia and Latin America. He is a registered professional engineer in
the Commonwealth of Massachusetts. Mr. Hall holds a BSME degree from Tufts University and an MBA degree
in finance/operations management from the MIT Sloan School of Management.
19
Victoria D. Harker, 46 years old, has been an Executive Vice President and CFO since January 2006. Prior
to joining the Company, Ms. Harker held the positions of Acting CFO, Senior Vice President and Treasurer of
MCI from November 2002 to January 2006. Prior to that, Ms. Harker served as CFO of MCI Group, a unit of
WorldCom Inc., from 1998 to 2002. Prior to 1998, Ms. Harker held several positions at MCI in the areas of
finance, information technology and operations. In November of 2009, she was elected to the board of directors
of Darden Restaurants, Inc. She has also been a member of the University of Virginia Board of Managers since
2007 and the board of the Wolf Trap Foundation for the Performing Arts since 2009. Ms. Harker received a
Bachelor of Arts degree in English and Economics from the University of Virginia and a Masters in Business
Administration, Finance from American University.
Brian A. Miller, 45 years old, is an Executive Vice President of the Company, General Counsel, and
Corporate Secretary. Since November of 2010, Mr. Miller has also served as the co-head of the Company’s
Development Steering Committee. Mr. Miller joined the Company in 2001 and has served in various positions
including Vice President, Deputy General Counsel, Corporate Secretary, General Counsel for North America and
Assistant General Counsel. In March of 2008, Mr. Miller joined the Board of AES Solar Energy, Ltd., a joint
venture between AES and Riverstone Holdings LLC. In 2009, he joined the board of AgCert International
Limited and AgCert Canada Holding Limited. Prior to joining AES, he was an attorney with the law firm
Chadbourne & Parke, LLP. Mr. Miller received a bachelor’s degree in History and Economics from Boston
College and holds a Juris Doctorate from the University of Connecticut School of Law.
Richard Santoroski, 46 years old, became an Executive Vice President in February 2010 and has led the
Company’s Global Risk & Commodity Organization since February 2008. Since November of 2010, he has also
served as co-head of the Company’s Development Steering Committee. Prior to his current position,
Mr. Santoroski was Vice President, Energy & Natural Resources, a business development group, and Vice
President, Risk Management. Mr. Santoroski joined AES in January 1999 to lead AES Eastern Energy’s
commodity management. Prior to AES, Mr. Santoroski held various engineering, trading and risk management
positions at New York State Electric & Gas, including leading the energy trading group. He graduated from
Pennsylvania State University with a Bachelor of Science in Electrical Engineering, and earned an MBA and a
Master of Science in Electrical Engineering from Syracuse University. Mr. Santoroski is a Licensed Professional
Engineer in the State of New York.
Andrew Vesey, 55 years old, is Executive Vice President and Regional President of Latin America and
Africa. He has held that position since April 2009. Prior to this, Mr. Vesey was Executive Vice President and
Regional President for Latin America from March 2008 through March 2009 and Chief Operating Officer for
Latin America from July 2007 through February 2008. Mr. Vesey also served as Vice President and Group
Manager for AES Latin America, DR-CAFTA Region from 2006 to 2007, Vice President of the Global Business
Transformation Group from 2005 to 2006, and Vice President of the Integrated Utilities Development Group
from 2004 to 2005. Prior to joining the Company in 2004, Mr. Vesey was a Managing Director of the Utility
Finance and Regulatory Advisory Practice at FTI Consulting Inc., a partner in the Energy, Chemicals and
Utilities Practice of Ernst & Young LLP, and CEO and Managing Director of Citipower Pty of Melbourne,
Australia. He received his BA in Economics and BS in Mechanical Engineering from Union College in
Schenectady, New York and his MS from New York University.
How to Contact AES and Sources of Other Information

Our principal offices are located at 4300 Wilson Boulevard, Arlington, Virginia 22203. Our telephone
number is (703) 522-1315. Our website address is http://www.aes.com. Our annual reports on Form 10-K,
quarterly reports on Form 10-Q and current reports on Form 8-K and any amendments to such reports filed
pursuant to Section 13(a) or Section 15(d) of the Securities Exchange Act of 1934 (the “Exchange Act”) are
posted on our website. After the reports are filed with, or furnished to, the Securities and Exchange Commission
(“SEC”), they are available from us free of charge. Material contained on our website is not part of and is not
incorporated by reference in this Form 10-K. You may also read and copy any materials we file with the SEC at
20
the SEC’s Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. You may obtain information
about the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330. The SEC maintains an
internet website that contains the reports, proxy and information statements and other information that we file
electronically with the SEC at www.sec.gov.
Our CEO and our CFO have provided certifications to the SEC as required by Section 302 of the
Sarbanes-Oxley Act of 2002. These certifications are included as exhibits to this Annual Report on Form 10-K.
Our CEO provided a certification pursuant to Section 303A of the New York Stock Exchange Listed
Company Manual on May 21, 2010.
Our Code of Business Conduct (“Code of Conduct”) and Corporate Governance Guidelines have been
adopted by our Board of Directors. The Code of Conduct is intended to govern, as a requirement of employment,
the actions of everyone who works at AES, including employees of our subsidiaries and affiliates. Our Ethics and
Compliance Department provides training, information, and certification programs for AES employees related to
the Code of Conduct. The Ethics and Compliance Department also has programs in place to prevent and detect
criminal conduct, promote an organizational culture that encourages ethical behavior and a commitment to
compliance with the law, and to monitor and enforce AES policies on corruption, bribery, money laundering and
associations with terrorists groups. The Code of Conduct and the Corporate Governance Guidelines are located in
their entirety on our website at http://www.aes.com. Any person may obtain a copy of the Code of Conduct or the
Corporate Governance Guidelines without charge by making a written request to: Corporate Secretary, The AES
Corporation, 4300 Wilson Boulevard, Arlington, VA 22203. If any amendments to, or waivers from, the Code of
Conduct or the Corporate Governance Guidelines are made, we will disclose such amendments or waivers on our
website.
Regulatory Matters
Overview
In each country where we conduct business, we are subject to extensive and complex governmental
regulations which affect most aspects of our business, such as regulations governing the generation and
distribution of electricity and environmental regulations. These regulations affect the operation, development,
growth and ownership of our businesses. Regulations differ on a country-by-country basis and are based upon the
type of business we operate in a particular country.
Regulation of our Generation Businesses

Our Generation businesses operate in two different types of regulatory environments: Market Environments
and Other Environments.
Market Environments. In market environments, sales of electricity may be made directly on the spot market,
under negotiated bilateral contracts, or pursuant to PPAs. The spot markets are typically administered by a
central dispatch or system operator who seeks to optimize the use of the generation resources throughout an
interconnected system (the cost of the least expensive next-generation plant required to meet system demand).
The spot price is usually set at the marginal cost of energy or based on bid prices. In addition, many of these
wholesale markets include markets for ancillary services to support the reliable operation of the transmission
system, such as regulation (a service that corrects for short-term changes in electricity use that could impact the
stability of the power system). Most of our businesses in Europe, Latin America and the United States operate in
these types of liberalized markets.
Other Environments. We operate Generation assets in certain countries that do not have a spot market. In
these environments, electricity is sold only through PPAs with state-owned entities and/or industrial clients as the
offtaker. Examples of countries where we operate in this type of environment include Jordan, Nigeria, Puerto
Rico and Sri Lanka.
21
Regulation of our Distribution Businesses
In general, our distribution companies sell electricity directly to end-users such as homes and businesses and
bill customers directly. The amount our distribution companies can charge customers for electricity is governed
by a regulated tariff. The tariff, in turn, is generally based upon a certain usage level that includes a pass-through
to the customer of costs that are not controlled by the distribution company, including the costs of fuel (in the
case of integrated utilities) and/or the costs of purchased energy, plus a margin for the value added by the
distributor, which is usually calculated as a fair return on the fair value of the company’s assets. This regulated
tariff is periodically reviewed and reset by the applicable regulatory agency. Components of the tariff that are
directly passed through to the customer are usually adjusted through an automated process. In many instances,
the tariffs can be adjusted between scheduled regulatory resets pursuant to an inflation adjustment or another
index. Customers with demand above a certain level are often unregulated and can choose to contract with
generation companies directly and pay a wheeling fee, which is a fee to the distribution company for use of the
distribution system. Most of our utilities operate as monopolies within exclusive geographic areas set by the
regulatory agency and face limited competition from other distributors.
Set forth below is a discussion of certain regulations we operate under in the countries where we do
business. In each country, the regulatory environment can pose material risks to our business, operations or
financial condition. For further discussion of those risks, see the Item 1A.—Risk Factors of this Form 10-K.
Latin America and Africa

Argentina
Structure of Electricity Market. The Argentine electricity market is divided into three separate lines of
business: generation, transmission and distribution. AES Argentina operates 12% of the installed capacity of the
Wholesale Electricity Market (“WEM”) and two distribution companies: one under federal jurisdiction–
EDELAP; and the other under the jurisdiction of the Province of Buenos Aires–EDES. The law recognizes a
category of large users made up of industrial companies and other consumers with substantial electricity supply
needs.
The WEM is comprised of:

• A Term Contracts Market, with contracts freely agreed amongst producers and consumers;
• A Spot Market, with prices sanctioned on an hourly basis considering the economic cost of production
represented by the short-term marginal cost (spot prices); and
• A Stabilization System on a quarterly basis of the prices forecasted for the spot market, created for the
purchase of the distributors (seasonal prices).
Principal Regulators. The National Electricity Regulating Agency (“ENRE”) is responsible for ensuring
transmission and distribution companies comply with the concessions granted by the Argentine government and
approving distribution tariffs. The WEM is managed by Compañía Administradora del Mercado Mayorista
Eléctrico, Sociedad Anónima (“CAMMESA”), the independent system operator. CAMMESA also acts as the
dispatch entity, or OED (Organismo Encargado de Desapacho), and manages the organization, dispatch and
operations of the WEM at large according to the policies established by the Energy Secretariat, under the
Ministry of Federal Planning, Public Investment and Services. In such capacity, CAMMESA is empowered to
interpret the rules relating to the organization, dispatch and energy agreements in the WEM. In addition to these
duties, CAMMESA manages the information on supply and demand in the WEM, which is used by the Energy
Secretariat to fix the seasonal prices and the market’s operational rules. CAMMESA’s operating costs are borne
by the WEM’s participants and agents.
In the Provincial Jurisdiction, the regulator is the Organismo de Control de la Electricidad de Buenos Aires
and the Dirección Provincial de Energía under the Ministry of Infrastructure.
22
Principal Regulations. The electricity sector activities are regulated by the Electricity Act. Law 24.065 and
Law 11.796 regulate the activities of generation, transmission and distribution of electric energy in the territory
of the Province of Buenos Aires, determining what activities of transmission and distribution of energy are public
services, whereas the generation is an activity of general interest.
Presently, the price of electric energy is determined assuming all generating units in Argentina are operating
with natural gas, even though the generators may be using more expensive, alternative fuels. In the case of
generators using alternative fuels, CAMMESA pays the total variable cost of production, which may exceed the
established spot price. Additionally, in the spot market, generators are also remunerated for their capacity to
generate electricity in excess of supply agreements or private contracts executed by them.
The Argentine government has adopted many new economic measures since 2002, by means of the
“Emergency Law” 25561, as amended and extended by various supplemental laws and regulations. These laws
and regulations effectively terminated the use of the United States Dollar as the functional currency of the
Argentine electricity sector. Distribution companies are ruled by their Concession Contracts on November 12,
2004.
Material Regulatory Actions. On July 31, 2008, the ENRE issued Resolution 324 that granted EDELAP a
tariff DVA increase of approximately 18%. In addition, the government recognized that a process to establish the
RTI (integral tariff reset) should take place during February 2009. On September 12, 2009, EDELAP submitted
the tariff reset proposal to the ENRE. ENRE is considering the tariff proposals submitted by the federal
distribution companies. If the regulatory agency continues to delay the granting of the tariff increase needed by
EDELAP, EDELAP could experience significant operational challenges in the future. Total DVA increase
granted to EDELAP pursuant to this process is 66%.
In March 2008, the Ministry of Infrastructure of the Province of Buenos Aires issued Resolution 741 which
settled a tariff increase of 15% average) to be applied for EDES during 2008 and an increase of 15% average to
be applied from 2009. On March 22, 2010, the Ministry of Infrastructure of the Province of Buenos Aires issued
Resolution 141 which settled the new tariff to be applied by EDES during 2010. It represents an average increase
of approximately 24%. Total DVA increase granted to EDES pursuant to this process is 190%.
During 2004, the Energy Secretariat reached agreements with natural gas and electricity producers to reform
the energy markets. In the electricity sector, the Energy Secretariat passed Resolution 826/2004, inviting
generators to contribute a percentage of their sales margins to fund the development and construction of two new
combined cycle power plants to be installed by 2008/2009 (“FONINVEMEM I & II”). The time period for the
funding was set from January 2004 through December 2006 and was subsequently extended through December
2007. During 2008, both power plants started operation of the gas turbines, and since March 2010, the plants
started operations in combined cycle mode. In exchange, the Argentine government committed to reform market
regulation to match more favorable regulations that existed prior to 2001. Additionally, participating generators
will receive a pro rata ownership share in the new generation plants after ten years.
Potential or Proposed Regulations. A non-binding general agreement with the rest of the Generators
operating in Argentina and the government was signed on November 25, 2010 to address a nation-wide problem
of overdue accounts receivables to the generation market. The non-binding agreement established the guidelines
for the detailed documentation that will allow the execution FONINVEMEM III project agreement and some
additional cash revenues. Under the agreement, accounts receivable accrued from July 2009 to December 2011,
for an amount of approximately $204 million will be converted into a generation asset (estimated at 800 MW) to
be built under the FONINVEMEM III project. The government will provide funds necessary to finance the
projects. The plant will have a PPA with CAMMESA for ten (10) years, calculated to recover 100% of the
receivables invested plus a margin of LIBOR + 5%. Payments will be made once the project begins operations.
We expect the existing FONINVEMEM I and II documents will be taken as a base for the future contracts;
assuming this, the collection of the 120 installment will not be tied to the availability of the plant. Availability
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risk will be assumed by the operator through a Long-Term Service Agreement (“LTSA”). Some penalties may
apply to the generating companies, but only in those cases where the unavailability is caused by their operating
decisions not considered in the LTSA. According to this, the yearly penalty would be capped at 10% of the
yearly amount required under the PPA. Initially, AES Argentina Generación S.A. will participate in this proposal
under the terms and conditions referred to above. Its equity ownership in the new project will equal its
contribution of receivables among the generating companies, estimated to be 24% of the resulting plants. Both
power plants that were built under similar regulations started full operation in combined cycle mode in March
2010, and the installments agreed are being paid on a timely basis.
Brazil
Structure of Electricity Market. In Brazil, there are two regulatory regimes which regulate PPAs the
Regulated Contracting Ambience (“ACR”), for the Generation and Distribution of Electric Power Agents, and
the Ambience for Free Contracting (“ACL”), for the Generation, Commercialization, Importers and Exporters of
Energy Power Agents as well as consumers.
This model establishes a number of requirements to be followed by the participants in the industry, such as
the obligation for distributors to contract for their market growth years in advance through regulated auctions;
hydro and thermal energy contracting conditions to ensure better balance between supply cost and system
stability; and a permanent supply monitoring structure to detect possible imbalances between supply and
demand.
Principal Regulators. In Brazil, there are a number of regulatory bodies which govern the electricity sector
including the Brazilian Electricity Regulatory Agency (“ANEEL”) and the Chamber of Electrical Energy
Commercialization (“CCEE”).
ANEEL’s responsibilities are to regulate and inspect production, transmission, distribution and
commercialization of electricity in order to assure quality of provided services and universal access. ANEEL is
also responsible for the establishment of tariffs for end consumers, in a way that the economic and financial
feasibility of power sector participants as Generation, Transmission and Distribution companies and such as the
industry as a whole is preserved. The changes brought about in 2004 by the new model made ANEEL
responsible for promoting, directly or indirectly, auctions for the Distribution companies to purchase energy
through long-term contracts within the National Interconnected System (Sistema Interligado Nacional) (“SIN”).
The CCEE (former Mercado Atacadista de Energia) paramount obligations include: the determination of the
Differences’ Price Settlement (Preço de Liquidação de Diferenças) (“PLD”), or Spot Price, used to value short-
term market transactions; the execution of the energy accounting process, identifying who and how much
electricity is involved in multilateral short-term market transactions; the financial settlement of the amounts
calculated in the energy accounting process; and preparation and execution of energy auctions within the ACR by
ANEEL’s delegation.
Principal Regulations.
Distribution Companies. AES has two distribution businesses in Brazil: AES Eletropaulo and AES Sul.
Under the power sector model, distribution companies have to purchase electricity at the regulated market
through auctions. Every distribution utility is obligated to contract to meet 100% of its energy needs in the ACR.
Bilateral contracts are being honored but cannot be renewed. The tariff charged by distribution companies to
captive customers is composed of a non-manageable cost component (“Parcel A”), which includes energy
purchase costs and charges related to the use of transmission and distribution systems and is directly passed
through to customers, and a manageable cost component (“Parcel B”), which includes operation and maintenance
costs based on a model distribution company defined by ANEEL, recovery of depreciated assets and a
component for the value added by the distributor (calculated as net asset base multiplied by pre-tax weighted
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average cost of capital). Parcel B is reset every four years for AES Eletropaulo and every five years for AES Sul.
There is an annual tariff adjustment to pass through Parcel A costs to customers and to adjust the Parcel B costs
by inflation, less an efficiency factor. Distribution companies could also be entitled to extraordinary tariff
revisions in the event of significant changes to their cost structure.
In the first half of 2010, all distribution companies signed amendments to the Concession Contracts,
capturing market variance effects over sector charges. AES Eletropaulo signed its amendment on May 3, while
AES Sul signed it on April 12. The 2010 tariff readjustment already reflected such amendment. Additionally,
ANEEL conducted a public hearing regarding the partition of the extraordinary tariff reset (“RTE”) between
Generation and Distribution companies. The RTE was designed to recover revenue losses of Distribution
companies and energy purchase costs of Generation companies, both during the rationing period that occurred in
2001 and as a result of regulatory, market and weather-related conditions. The RTE’s period of application for
AES Eletropaulo was limited to 70 months, which was not sufficient to recover its revenue losses. The Public
Hearing process was concluded on January 12, 2010, generating an initial negative impact before taxes to AES
Eletropaulo of R$6.8 million ($4.1 million) recorded in 2009, offset by a positive impact before taxes of R$7.3
million ($4.4 million) recorded in 2010 for additional RTE adjustments. AES Tietê recorded revenue of R$6.2
million ($3.7 million) in 2010.
Generation Companies. AES has two generation businesses in Brazil: AES Tietê and AES Uruguaiana.
Under the power sector model, the Ministry of Mines and Energy MME determines the amount of energy to be
sold by each plant known as “assured energy” or the amount of energy representing the long-term average energy
production of the plant defined by ANEEL. Together with the system operator, ANEEL establishes the assured
energy which is the amount of energy to be sold by each plant through long term contracts. The system operator
determines generation dispatch which takes into account nationwide electricity demand, hydrological conditions
and system constraints. In order to mitigate the risks involved in hydroelectric generation for each generator and
to optimize the system generation capacity, a mechanism is in place to transfer energy from those who generated
more than the average of the system to those who generated less than the average. The energy that is reallocated
through this mechanism is priced pursuant to an energy optimization tariff, designed to optimize the use of
generation available in the system.
AES Tietê is allowed to sell electric power within the ACR and ACL, maintaining the competitive nature of
the generation. Generation companies must provide physical coverage from their own power generation or
purchase contracts for 100% of their sale contracts. The failure to provide the required physical coverage and/or
present purchase contracts, which is subject to monthly verification, exposes the generation company to the
payment of penalties.
Beginning in 2003, 25% of AES Tiete’s assured energy has been added annually to the volume marketed
through a PPA and consequently since 2006, all of AES Tiete’s assured energy has been sold to AES
Eletropaulo. The PPA entered into with AES Eletropaulo which expires on December 31, 2015, and requires that
the price of energy sold be adjusted annually based on the Brazilian inflation variation. Before the end of the
PPA in 2015, AES Tietê must seek alternatives to the immediate re-contracting of its assured energy from 2016
onwards. Existing legislation allows AES Tietê to allocate its energy to the regulated auctions of existing energy,
or in the free market through bilateral contracts for non-distribution companies.
The state of São Paulo stablished some conditions to privatize the generation sector in Sao Paulo state
including an obligation to increase generation capacity by 15%, originally to be accomplished by the end of
2007. AES Tietê, as well as other concessionaire generators, were not able to meet this requirement due to
regulatory, environmental and hydrological constraints. Currently, the matter is under consideration by the
government of the State of São Paulo (related to the increased capacity) after a decision by ANEEL’s Board of
Officers that ANEEL is not the appropriate authority to consider the extension, since the expansion obligation
derives from the purchase and sale agreement between AES Tietê and the Government of São Paulo, and not
from the concession agreement itself. AES Tietê is reviewing any may pursue the development of certain
gas-fired facilities in order to meet this obligation.
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Environmental Regulations. Electric sector companies are subject to strict environmental legislation in
federal, state and municipal spheres in matters such as atmospheric emissions and special protected areas. Such
companies need permits and authorizations from government bodies in order to conduct their activities. In case
of violation of or non-compliance with such laws, regulations, permits and authorizations, companies may suffer
administrative sanctions such as fines, shutdown of activities, invalidation of permits and the annulment of
authorizations. The government Attorney’s Office may institute a civil investigation and/or promote a public
civil action seeking indemnity for environmental or third-party damages. Government agencies or other
authorities may enact new stricter rules or search for more restrictive interpretations of existing laws and
regulations that may oblige power companies to spend additional resources for environmental compliance,
including attainment of environmental permits for facilities and equipment that did not require those types of
permits previously. Government agencies or other authorities may delay the issuance of permits and necessary
authorizations for the development of power companies causing project implementation schedule delays and,
consequently, unfavorable effects in the companies’ businesses and results. Any action in this direction from the
government agencies may negatively affect businesses in the power sector and have adverse effects on the
business and results of the companies.
Material Regulatory Actions. According to the Concession Contract, distribution companies go through a
tariff adjustment process every year. AES Eletropaulo was granted an 8.00% average tariff adjustment to be
applied to the Company’s tariff as from July 4, 2010. AES Sul’s average tariff adjustment was 5.56% as of
April 19, 2010.
On May 16, 2002, ANEEL issued the Order #288, a regulation that established the retroactive denial to the
choice of not participating in the “exposition relief mechanism,” a tool that allowed the sale of energy from
Itaipu Generating Co. in the Spot Market. Due to its negative impact, AES Sul filed a lawsuit seeking the
annulment of Order #288. For a further discussion of this dispute see Item 3.—Legal Proceedings in this
Form 10-K.
Potential or Proposed Regulations. In 2011, the Third Reset Cycle begins; AES Eletropaulo’s will take
place in 2011 and AES Sul’s will occur in 2013. A public hearing proposed a new methodology for tariff reset
and our comments were submitted on January 10, 2011, There is a another on going regarding a new
methodology for tariff reset promote a new methodology for defining quality of service indicators. The outcome
of these hearings is unknown. However, if the revised tariff is inexplicitly low or our quality of service indicators
are found inadequate, there could be a material impact on our business.
Cameroon
Structure of Electricity Market. Our subsidiaries in Cameroon are involved in the generation, transmission,
distribution and sale of electricity through AES SONEL, Dibamba Power Development Company (“DPDC”) and
Kribi Power Development Company (“KPDC”). AES SONEL is an integrated utility which operates
approximately 930 MW of generation capacity, two interconnected transmission networks and distributes
electricity to approximately 700,000 customers under a 20-year concession agreement that was signed in July of
2001. AES SONEL has the exclusive distribution rights to all medium voltage and low voltage customers, except
for customers with an installed capacity of more than 1 MW (“Major Customers”) who are free to negotiate
bilateral agreements. Generation in Cameroon is open for competition and our subsidiary, DPDC, developed,
built and is currently operating an 86 MW heavy fuel oil power plant near Douala as an IPP which provides
power to AES SONEL under a tolling agreement. In order to meet increasing demand for power, the government
is developing the Lom Pangar Dam project on the Sanaga River which will increase the flows of the Sanaga
River and increase the generation capacity of the two major hydro power plants currently operated by AES
SONEL. The Lom Pangar Dam will also generate 50 MW. Another AES subsidiary, KPDC, is developing a 216
MW gas-fired power plant in Kribi as another IPP which will provide power to AES SONEL.
Under its Concession Agreement, AES SONEL operates the two interconnected transmission networks in
the country: the Southern Grid with a length of 1550 km and the Northern Grid with a length of 665 km. Major
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Customers, distributors, or vendors can access the grid subject to paying a fee. Sales to low voltage and medium
voltage customers are subject to tariff levels agreed to between AES SONEL and the regulator based on the
framework established in the AES SONEL Concession Agreement. Management of energy flows on the
transmission network is currently undertaken by AES SONEL. Under the Concession requirements, AES
SONEL will be required to create a separate legal entity under which the transmission system will operate. Under
the regulation in force, such entity is contemplated to be a 100% subsidiary of AES SONEL whose share capital
will be opened up to other operators in the sector in accordance with procedures to be approved by the regulator.
Principal Regulators. Cameroon’s electricity regulatory agency, ARSEL, has functional and decision-
making autonomy, and is run by a Board of Directors and a General Manager assisted by a Deputy General
Manager. Its financing is provided by the state budget and fees collected from revenues generated from activities
carried out by operators of the sectors concerned. ARSEL’s decisions are highly influenced by the government
via the Ministry of Power, the Prime Minister’s Office and the General Secretariat of the Presidency of the
Republic. The Ministry of Energy and Water is the Ministry mandated to issue specific regulations relating to the
electricity sector and to issue the concessions, licenses and authorizations to be granted to the operators in the
sector.
Principal Regulations. The principal legislative instrument governing the power sector is Law No. 98/022 of
December 24, 1998 which sets out a new institutional framework for the Power Sector and lays the foundations
for competition in the power market in Cameroon. It is supplemented by the following instruments:
• Decree No. 2000/464/PM of June 30, 2000 governing the activities of the power sector;
• Decree No. 2001/021/PM of January 29, 2001 setting out the rates and methods of calculation,
collection and distribution of the fees payable by operators involved in the power sector;
• Ministerial Order No. 061/CAB/MINMEE of January 30, 2001 setting out the documents and fees
required in applying for concessions, licenses, authorizations and declarations for the generation,
transmission, distribution, export and sale of power;
• Ministerial Order No. 000013/MINMEE of January 26, 2009 approving the regulation of the public
distribution of electricity in Cameroon; and
• The Concession Agreements and license between the Republic of Cameroon and AES SONEL signed
on July 18, 2001 and amended in 2006.
Material Regulatory Issues. Cameroon is currently preparing for presidential elections in 2011 and local
elections in 2012. Tariff adjustments expected for 2010 were challenged by the government, resulting in
shortfalls of compensation due under the Concession Agreement to AES SONEL for 2010 and 2011. Following
lengthy negotiations, a compensation agreement was signed by both parties on November 24, 2010, which
provides, among other things, for compensation to be paid to AES SONEL by the government of Cameroon for
any revenue shortfall in 2010 and 2011 arising from the difference between tariffs applied to end-users and tariffs
due under the Concession Agreement. The estimated shortfall for 2010 was approximately $22 million, which
has been paid in full. The normal tariff mechanisms to end-users are expected to be restored in 2012.
Environmental Regulations. The environmental regulation is derived from Law No. 96/12 of August 5, 1996
and various implementing decrees and ministerial orders. This regulation applies to all sectors but there are some
specific requirements relating to the electricity sector. The main requirement of this regulation is the obligation to
conduct an environmental impact analysis for planned construction of new generation installations or new
transmission lines or substations.
Potential or Proposed Regulations. In addition, there are plans to review the legal and regulatory framework
of the power sector to consider the formation of new public entities. Presently, to make up for the power shortage
anticipated in 2012 (due to delays in commissioning the Kribi power plant developed by KPDC and the Lom
27
Pangar Dam developed by the government) and the additional demand generated by a number of infrastructural
projects, the government is planning to construct thermal plants with an overall capacity of 40 MW and a
hydroelectric plant with a capacity of 200 MW. Additionally, there are other generation projects whose
specifications have yet to be clearly determined. The regulatory framework relating to the development of this
new capacity and to the future contractual relationship between these new projects and AES SONEL is still
unclear. However, the tariff compensation agreement referred to above provides that additional costs imposed on
AES SONEL with regard to these projects shall be fully passed through in tariffs charged to end-users.
Despite the provisions of the regulation described above relating to the operation of the transmission
network, the Minister of Energy has formally expressed his preference for a different solution that would take
responsibilities for transmission activity and management of the transmission grid away from AES SONEL and
assign them to a new public entity to be created and majority-owned by the state. The impact on AES is not
known at this time; however, it could be material to our results of operations.
Chile
Structure of Electricity Market. In Chile, except for the small isolated systems of Aysén and Punta Arenas,
generation activities are principally in two electric systems: the Central Interconnected Grid (“SIC”), which
supplies approximately 92% of the country’s population; and the Northern Interconnected Grid (“SING”), where
the principal users are mining and industrial companies. Power generation is based primarily on long-term
contracts between generation companies and customers specifying the volume, price and conditions for the sale
of energy and capacity. The law recognizes two types of customers for generation companies: unregulated
customers and regulated customers. Unregulated customers are principally consumers whose connected capacity
is higher than 2 MW and consumers whose connected capacity is between 500 kW and 2 MW who have selected
the unregulated pricing mechanism for a period of four years. These customers are not subject to price regulation
and are able to freely negotiate prices and conditions for electricity supply with generation and distribution
companies. Regulated customers are those whose connected capacity is less than or equal to 500 kW and those
with connected capacity between 500 kW and 2 MW who have selected, also for four years, the regulated pricing
system.
Electricity generation in each of the SIC and the SING is coordinated by the respective independent
Economic Load Dispatch Center (“CDEC”) in order to minimize operational costs and ensure the highest
economic efficiency of the system, while fulfilling all quality of service and reliability requirements established
by current regulations. In order to satisfy demand at the lowest possible cost at all times, each CDEC orders the
dispatch of generation plants based strictly on variable generation costs, starting with the lowest variable cost,
and does so independent of the contracts held by each generation company. Thus, while the generation
companies are free to enter into supply contracts with their customers and are obligated to comply with such
contracts, the energy needed to satisfy demand is always produced by the CDEC members whose variable
production costs are lower than the system’s marginal cost at the time of dispatch. For this reason, in each hour a
given generator is either a net supplier to the system or a net buyer. Net buyers pay net suppliers the system’s
marginal cost. In addition, the Chilean market is designed to include payments for capacity (or firm capacity),
which are explicitly paid to generation companies for contributing to the system’s sufficiency. The cost of
investment and operation of transmission systems is borne by generation companies and consumers (regulated
tolls) in proportion to their use.
Principal Regulators. The Chilean Ministry of Energy, created in 2010, grants concessions for the provision
of the public service of electric distribution and the National Commission for the Environment administers the
system for evaluating the environmental impact of projects. Thermoelectric plants do not require electrical
concession agreements from the government in order to be built or operate. The new Ministry of Energy works
with several agencies related to energy issues, such as the National Energy Commission (“NEC”), the Electricity
and Fuel Superintendent and the Chilean Nuclear Commission, among others, in order to provide a better
coordination of energy affairs. The Ministry of Energy will also oversee a new Energy Efficiency agency. The
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NEC establishes, regulates and coordinates energy policy. The Superintendent of Electricity and Fuels oversees
compliance with service quality and safety regulations. The General Water Authority issues the rights to use
water for hydroelectric generation plants. The Chilean electric system includes a Panel of Experts—an
independent technical agency whose purpose is to analyze and resolve in a timely fashion conflicts arising
between companies within the electric sector and among one or more of these companies and the energy
regulators. In addition, the Ministry of Environment is responsible for the development and implementation of
environmental regulations, protection of the environment, environmental education and pollution control, among
others.
Principal Regulations. The distinct electricity sector activities are regulated by the General Electricity
Services Law. Sector activities are also governed by the corresponding technical regulations and standards. The
keystones of the electricity regulation are: (i) a regulated compulsory marginal cost dispatch based on audited
variable costs; (ii) a contract-based wholesale generation market; (iii) an open-access regime for transmission
with benchmark regulation for existent transmission lines and open bids for new lines; (iv) benchmark regulation
for the distribution grid; and (v) electricity retailing by distribution companies in their exclusive concession
areas.
In accordance with these laws, new contracts assigned by distribution companies for consumption from
2010 onward must be awarded to generation companies based on the lowest supply price offered in public bid
processes. These prices, called “long-term node prices,” include indexation formulas and are valid for the entire
term of the contract, up to a maximum of fifteen years. More precisely, the long-term energy node price for a
particular contract is the lowest energy price offered by the generation companies participating in each respective
bid process, while the long-term capacity node price is that set in the node price decree in effect at the time of the
bid.
On February 17, 2011, President Sebastian Pinera’s administration enacted an energy decree that enables the
government to take preventive measures to reduce the risk of future energy shortages. Chile is experiencing a
significant drought that has diminished the country’s reservoir levels and hydroelectric power capacity affecting
the (SIC). The decree will be in forced until August 2011 and focuses on three main actions: cutting available
voltage by 10-12.5%; saving reservoir capacity up to 500 GWh; and offering incentives for consumers to save
electricity. The decree is not expected to have a material impact on AES Gener’s results in 2011
Environmental Regulations. Law 20,257 was enacted in April 2008 and promotes non-conventional
renewable energy sources, such as solar, wind, small hydroelectric and biomass energy. The Law requires that a
percentage of the new power purchase contracts held by generation companies after August 31, 2007 be supplied
from renewable sources. The required energy percentage begins at 5% for 2010-2014, and gradually increases to
a maximum of 10% in 2024. Generation companies are charged for each kWh not supplied in accordance with
the Law. Our businesses in Chile have developed a plan for complying with this law, which includes the sale of
certain water rights, the purchasers of which have agreed to build a small hydroelectric plant and sell the energy
to our businesses in Chile at a fixed price.
Potential or Proposed Regulations. In December 2009, the environmental agency published a draft of a
potential new ruling which will regulate the emissions from thermal power plants of NOX, SO2, particulate matter
(“PM”) and metals. The President of Chile approved the regulation on January 18, 2011 and the regulation will
become effective upon approval of the General Comptroller of Chile. The regulation will require AES Gener, our
Chilean subsidiary, to install emissions reduction equipment at its existing thermal plants from late 2011 through
2015. The exact costs of compliance with such regulation have not yet been determined and the Company
believes some of the compliance costs are contractually passed through to counterparties. However, the
compliance costs could be material.
A proposed law which would give new incentives to Non-Conventional Renewable Energy (“NCRE”) such
as solar, wind, small hydroelectric and biomass energy is under discussion in the Congress. The proposed law
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increases the requirements of NCRE beginning 2015, such requirements reaching 20% as a percentage of the
customer load in 2020. The current law imposes a requirement to reach 10% in 2024. The new requirements
would need to be fulfilled with NCRE coming from the same system (separates SIC and SING). The NCRE
would need to be accredited by the NEC, which may impose fines for non-compliance. The impact to AES Gener
is under analysis; however, it will depend on the new size limit of small run of river units and if the new
requirement affects the current supply contracts, which only include the 10% required by the current law. The
proposed law, if passed, could result in increased costs or otherwise have a material impact on our results of
operations.
In September 2010, the NEC proposed a new normative in Ancillary Services (“AASS”) based on a cost-
efficient regulation informed by generators and customers. The normative regulates the AASS transactions
among generators in: regulation, spinning reserve, non-operating reserve and the Automatic Load Shedding
Scheme (“ALSS”). AES Gener has presented observations principally against compulsory investments requested
by the CDEC; AASS costs allocated incorrectly among generators according to their power generation (it
believes it should be according to their electricity withdrawals) and the ALSS’s are a demand-side obligation and
adjustment mechanisms are only considered for imbalances in contributions between consumers. AES Gener is
assessing the potential impact of this regulation, and an estimate of the impact can only be established when the
final regulation is issued. However, if passed, the regulations could result in required investments or other
increased costs which could have a material and adverse impact on our results of operations.
Colombia
Structure of Electricity Market. Colombia has one main national interconnected system (the “SIN”). The
wholesale market is organized around both bilateral contracts and a mandatory pool and spot market for all
generation units larger than 20 MW.
In the spot market, each unit bids its availability and a set price for a 24-hour period. The dispatch is
arranged from lowest to highest bid price and the spot price is set by the marginal price. There are two types of
customers: unregulated customers and regulated customers. Unregulated customers are consumers whose
maximum capacity consumption is higher than 0.1 MW, or whose energy demand is greater than 55 MWh/
month. These customers are not subject to price regulation; therefore, generators or trader companies are able to
freely negotiate prices and conditions for electricity supply with them. Regulated customers have their prices
determined by means of public tenders.
Electricity generation in the Colombian system is coordinated by the market administrator whose goal is to
minimize operational costs while fulfilling all quality-of-service and reliability requirements established by
current regulations. In order to satisfy demand at the lowest possible cost at all times, market administrator orders
the dispatch of generation plants based on offer price (variable cost plus reliability charge) by merit, starting with
the lowest offer price, and does so independent of the contracts held by each generation company. For this
reason, in each hour a given generator is either a net supplier to the system or a net buyer. Net buyers pay net
suppliers the system’s spot price. In addition, the Colombian market is designed to include reliability payments,
which are paid to generation companies for contributing to the system’s sufficiency. The cost of investment and
operation of transmission systems are borne by the consumers in proportion to their use.
Principal Regulators. The Ministry of Mines and Energy (“MME”) establishes the energy policies and the
Regulatory Commission of Electricity and Gas (“CREG”) was created to foster the efficient supply of energy
through regulation of the wholesale market, the natural monopolies of transmission, and distribution, and by
setting limits for horizontal and vertical integration. The Ministry of the Environment (“MMA”) establishes the
environmental policies.
The Public Services Superintendence supervises the correct provision of utilities and the Industry and
Commerce Superintendence is in charge of sanctioning any anticompetitive practice. Other entities that have an
30
impact on the electric system include the Energy Planning Unit (“UPME”), in charge of planning the electricity
and gas system, and the National Development Planning Office (“DNP”), whose main role is to develop a
general development plan for the government.
Principal Regulations. The laws of Domiciliary Public Services and the Electricity Law set the institutional
arrangement and the general regulatory framework for the electricity sector. The keystones of the electricity
regulation are: (i) the dispatch is based on an offer price that represents the variable cost of the plants; (ii) a
contract-based wholesale generation market; (iii) an open access regime for transmission with revenue regulated
for existent transmission lines and open bids for new lines; (iv) revenue regulated for the distribution grid; and
(v) electricity retail can be performed by distribution and/or traders.
The spot market started in July 1995, and in 1996 a capacity payment was introduced for a term of ten years.
In December 2006, a regulation was enacted that replaced the capacity charge with the reliability charge and
established two implementation periods. The first period consists of a transition period from December 2006 to
November 2012 during which the price is equal to $13.045 per MWh and volume is determined based on each
plant’s firm energy which is prorated so that the total firm energy level does not exceed system demand. During
the second period, which begins on December 2012, the reliability charge will be determined based on the energy
price and the volume of offers submitted by market participants bidding for new capacity for the system. The
first reliability charge auction was held in May 2008 with the following results: (i) the reliability charge for
existing plants for the period between December 2012 and November 2013 will be $13.998 per MWh; (ii) for
new plants that won the auction, the charge will be paid for twenty years starting December 2012; and (iii) three
new projects won the auction for a total capacity of 430 MW starting in 2012. The new methodology established
in 2006 recognized the reliability provide by Chivor’s system and favored the company by increasing the
reliability charge by approximately 120%, moving from $18 million in 2006 to almost $40 million in 2007 and is
expected to have a similar amount per year until 2015.
Environmental Regulations. In Colombia, Law 99 created the MMA in 1993. This law requires that projects
that affect the land or impact the environment must obtain a license from the MMA. While regional
environmental authorities can issue licenses for generation projects with capacity of less than 100 MW, only the
MMA has the authority to issue licenses for the construction of large-scale generation or transmission projects.
Chivor initiated operations in 1977 through a water concession, the only environmental requirement at that time.
Furthermore, in August 1995 the MMA requested hydroelectrical plants, including Chivor to fulfill the
requirements of an “Environmental Management Plan,” which serves as an environmental permit to operate.
Each year, Chivor has to demonstrate to the environmental authorities that the obligations included in such plan
are accordingly fulfilled. Additionally, hydro plants must contribute 6% of their gross generation and thermal
plants 4% of their gross generation to the area of influence valued at a special tariff defined by CREG. In 2008,
MMA issued Resolution 909 that regulates the emission of thermal power plants. This Resolution is not expected
to affect Chivor because it is a hydro but could affect AES if we decide to acquire or build a thermal plant in
Colombia.
Potential or Proposed Regulations. CREG issued a proposal to create the Organized Regulated Market
(“MOR”). The MOR will replace the current bilateral contracts markets (between traders/utilities and generators)
by putting in place a centralized auction in which the Market Administrator buys energy for all regulated
customers served by the traders/utilities. The main provisions contained in the proposal are: (i) it is mandatory
for all traders/utilities to buy energy at the auction price and it is voluntary for sellers (generators and trade
companies) to offer energy in each auction; (ii) one single price for the energy sales in the auction; (iii) the
auctions are held one year before the actual dispatch and the commitment period of the auction is one year; and
(iv) to establish four auctions per year. Bilateral contracts executed before the beginning of the MOR’s operation
will not suffer any change and will remain valid. In general, we consider that if MOR is correctly designed, it
should benefit our businesses in Colombia. We expect that a definitive resolution will be issued in the first half of
2011.
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During 2010, MME issued Decree 2730 which intends to solve the potential long-term and/or cyclical
unavailability of gas by (i) importing LNG and (ii) establishing strategic storage alternatives. Also, the
government presented the basis for the “National Development Plan 2011–2014.” For the electricity sector, the
plan mainly focuses on: (i) maintaining stability of the current regulatory framework, supporting the current
reliability charge structure, promoting fair competition among technologies and guaranteeing no new taxes to
transactions made in the wholesale market; (ii) assuring energy supply for the medium and long term;
(iii) enhancing and strengthening the electricity market’s competitiveness in order to maintain investment
confidence and convert the electricity system in Colombia into a world class sector; (iv) making the right
decisions in the natural gas sector to make it reliable; and (v) promoting institutional improvement guided by
transparency, independence and efficiency. Among these initiatives, they are considering reviewing the
separation of National Dispatch Center from the Commercial Transactions Administrator and self-regulation
initiatives to avoid or minimize interventions in the market by the government. These initiatives also seek to
resolve the gas supply problem for thermal plants. As a result, we believe they may be favorable to our business
in Colombia because they may improve the overall reliability of the electricity system and reduce the current
uncertainties. Additionally, we believe these initiatives may help Chivor better manage its water resources and its
associated risk and may also provide more certainty about long term energy prices. Furthermore, the National
Development Plan proposal aims to maintain the stability and certainty of the market rules in order to consolidate
the investor trust.
As a part of CREG regulatory agenda for 2011, the regulator is planning to review the lessons learned from
the dry conditions brought by the 2009-10 “El Niño” phenomenon and issue regulations for these extreme events,
permitting players to know in advance the additional reliability measures that the regulator may take under those
circumstances. Also, CREG is planning to issue regulations that will strengthen the energy market by improving
the spot market guarantees scheme, and establish measures to control market power from pivotal agents (agents
needed at any cost to fulfill the demand requirements). This last initiative may affect spot prices but should not
materially impact AES as Chivor has a high level of coverage through bilateral contracts.
Dominican Republic
Structure of Electricity Market. The Dominican Republic has one main interconnected system composed
primarily of thermal generation and supplemented by hydroelectric power plants that harness power from
available rivers. The regulatory framework in the Dominican Republic consists of: decentralized industry;
unbundled generation, transmission and distribution; regulated prices in monopolistic segments (transmission and
distribution); and a competitive wholesale generation market. In accordance with this regulatory structure, all
agents and electric generation, transmission and distribution companies must conduct their operations to provide
the best service at minimum cost; and comply with standards of quality, safety, continuity of services and
conservation of the environment.
The spot or wholesale market is based on a centralized economic dispatch. The Organismo Coordinador
(“OC”) is in charge of planning and supervision of operations through the “Centro del Control del SENI,” which
is in charge of real-time dispatch. The dispatch of the thermal units is based on auditable declared variable costs
and, for the hydro units, the variable cost is equal to zero, meaning that these units are the first for dispatch and
reflect optimal system costs. The spot market relies on competitive bidding based on each generator’s variable
costs as a means of providing a merit order for dispatch. Variable cost information is submitted weekly by the
generators to the OC, which then determines the merit order for dispatch based on this information.
For the sale of electricity under long-term contracts, the regulatory framework establishes that the sale of
electricity of a generating company to a distribution company will be done at prices resulting from the
competitive procedures of public bidding. These bids are governed by the conditions established by the
Superintendency of Electricity (“SIE”) which supervises the bidding and awarding process. With the objective of
ensuring that generation prices represent reasonable values in the market, the SIE ensures that the sale of
electricity through contracts is not greater than 80% of interconnected electric energy demand, and that the spot
market represents a minimum of 20% of the total national consumption of the interconnected system annually.
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The electricity tariff applicable to regulated customers is subject to regulation within the concessions of the
distribution companies. Electricity end-users are considered customers of public services according to
regulations; hence the tariff is set by resolution of the SIE. For clients with demand above 1.2 MW who are
classified as unregulated customers, tariffs are unregulated.
Principal Regulators. In order to regulate the electric sector and implement the provisions contained in the
General Electricity Law No. 125 and its By-Law, two regulators are responsible for monitoring and ensuring
compliance with the law: the National Energy Commission (“CNE”) and the SIE. All electric companies
(generators, transmission and distributors), are subject to and regulated by the General Electricity Law, whether
they are of national and/or foreign capital, private and/or public.
In general, CNE’s main responsibilities are to draft and coordinate the legal framework and regulatory
legislation; propose and adopt policies and procedures to assure best practices; draft plans to ensure the proper
functioning and development of the energy sector and propose them to the executive branch; ensure compliance
with the law; promote investment decisions in accordance with these plans; and advise the executive branch on
all matters related to the energy sector. The SIE’s main responsibilities are to develop, ensure compliance with
and analyze the structure and level of prices of electricity and to set the rates and tolls subject to regulation. SIE
also reviews electricity rate levels requested by companies, monitors and supervises compliance with legal
provisions and rules and monitors compliance with the technical procedures governing generation, transmission,
distribution and commercialization of electricity. In addition, SIE supervises electric market behavior in order to
avoid monopolistic practices and applies penalties and fines in the cases of non-compliance with the laws and
regulations.
Principal Regulations. The energy sector regulatory framework in the Dominican Republic is governed
primarily by:
• General Electricity Law 125-01, its by-law and its amendment by Law 186-07, constitute the legal
framework which regulates all phases related to the production, transmission, distribution and
commercialization of electricity, as well as the functions of State agencies created by this Law and
related to these matters. The regulatory framework in the Dominican electricity market establishes a
methodology for calculating the firm capacity for each power generation unit.
• Renewable Energy Incentives Law 57-07 establishes incentives for renewable energy, mainly income
tax exemption, import taxes reduction, as well as special operational, technical and commercial
treatment. The law applies to hydro generation with a capacity equal to or below 5 MW, wind
generation with a capacity less than 50 MW, biomass generation with a capacity less than 80 MW,
photovoltaic generation, and thermo-solar generation with a capacity less than 120 MW.
• Hydrocarbons Law 112-00 is a regime that established a tax on consumption of fossil fuels and oil. All
fossil fuels used to produce electricity has a tax exemption under the law, as well as natural gas, and
any change in this regulation does not affect AES Dominicana as a natural gas provider. All agents that
use any fossil fuel to produce electricity need a resolution from CNE and the Industry and Commerce
Ministry to apply for this exemption.
• Industry and Commerce Ministry periodic resolutions for technical and price regulations for vehicular
natural gas use (transportation).
In addition, the Dominican government has directly exercised varying degrees of regulation over the
electricity market and AES Dominicana’s businesses in the past, such as involvement in the re-negotiation of the
existing PPAs, oversight responsibilities of the SENI and environmental controls. No assurance can be given that
the Dominican government will not alter regulations in the future in a way that will negatively affect AES
Dominicana’s businesses, financial conditions or results of operations.
Environmental Regulations. The main environmental regulations are the General Law on Environment and
Natural Resources 64-00 and the Regulation and Licensing Systems Environmental Permits by-law. These
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regulations provide for centralized environmental planning by the state through the integration of environmental
protection and economic development plans in a common approach and policy throughout the sector.
Environmental management is achieved through permits or environmental licenses, environmental quality
standards and environmental reporting. The main regulatory institutions are:
• The Ministry for the Environment and Natural Resources, which is responsible for implementing and
designing the policy for the conservation and protection of the environment and natural resources in the
Dominican Republic;
• National Council of Environment and Natural Resources which is the link between the various
Ministries of State in charge of evaluating the impact of environmental policies; and
• Procurator for the Defense of the Environment and Natural Resources, which is responsible for
performing the actions by the State Environmental conflicts environment.
Despite extensive compliance plans in place by each of the entities, it is possible AES Dominicana
generating units could fall out of compliance with such environmental standards. Such non-compliance, and
resulting penalties or bad publicity might negatively affect the financial results of AES Dominicana. One such
penalty could be a requirement that AES Dominicana operates its offending unit below its rated capacity, and
such unavailability might affect compliance with obligations under its PPAs. In such a scenario AES Dominicana
might need to make significant investments in environmental-related infrastructure. In addition, the
environmental laws and regulations may become more stringent and AES Dominicana might be forced to make
certain investments to be compliant with the new standards.
Potential or Proposed Regulations. Last year, the CNE proposed a Natural Gas Act, which seeks to
establish new regulations for the services and the commercialization of natural gas, which may result in access
barriers to develop the natural gas market. The proposed law does not establish a mechanism for promoting
investments in the construction of new gas pipelines or kits for fuel conversion for the automotive sector in
accordance with modern regulation in this market. However, AES does not currently expect any material impact
to AES Dominicana with the promulgation of such law, mainly because AES Dominicana’s role is as a supplier
of natural gas to the Dominican Republic, which is not regulated under the Natural Gas Act.
El Salvador
Structure of Electricity Market. The Salvadorean electricity market is composed of a single interconnected
system. Under the General Electriticity Law (“GEL”), competition was introduced in generation and trading and
additional regulations were implemented related to price and quality of service in non-competitive segments such
as distribution, transmission, system operation and administration.
The wholesale electricity market is based on a contract market and a spot market. The contract market is
further classified into bilateral contracts, which are freely negotiated by electricity generators, distributors, and
trading companies; and regulated contracts, which are the product of regulated public bids carried out by the
distribution companies under the supervision of the Regulator, Superintendencia General de Electricidad y
Telecomunicaciones (“SIGET”). Starting in June 2011, the distribution companies are required to acquire 70% of
their forecasted demand through regulated bids. The spot market is structured as a day-ahead market, and
transactions are settled on a monthly basis. Currently, the price-setting mechanism for the spot market is based
on a bidding system. Regulations are in place to implement a cost-based system to replace the current bidding
system.
Distribution companies are regulated under an incentive system, specifically a Revenue Cap system,
whereby the maximum tariff to be charged to the end-users is subject to the approval of SIGET. The components
of the electricity tariff are (i) charges for the use of the distribution network (the “Distribution Charge”),
(ii) customer service costs (the “Service Charge”) and (iii) average energy price (the “Energy Charge”). Both the
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Distribution Charge and Service Charge are based on average capital costs as well as operation and maintenance
costs of an efficient distribution company. The Distribution Charge and Service Charge are approved by SIGET
every five years and have two adjustments: (i) an annual adjustment considering the inflation variation and (ii) an
automatic adjustment in April, July and October, provided that the change in inflation is greater than 10%.
Competition is encouraged by the GEL and it provides the end user with the option to acquire its electricity
from a Distribution Company or an electricity trader. The Distribution and Transmission Companies are
mandated by the GEL to allow the use of the distribution grid to traders in order to deliver electricity to their
customers. The grid access terms, including tariffs, are detailed in a “distribution contract” registered and
regulated by SIGET.
Principal Regulators. SIGET is the Independent Regulatory Authority established through the GEL.
SIGET’s principal responsibilities and attributions are approval of Distribution Charges, enforcement of sector
regulation, dispute resolution among market participants, granting concessions for hydroelectric and geothermal
projects, among others.
In addition, the National Energy Council, formed in 2007, is the policy-making entity, whose board of
directors is composed by the Secretaries of the Treasury, the Economy, Public Works, Environmental and
Natural Resources and the Consumer Protection Agency.
Principal Regulations. The electricity sector is governed by the General Electricity Act, the General
Electricity Act Regulations, the Transmission System and Wholesale Market Operating Regulations and the
general and specific orders issued by SIGET, under its statutory attributions.
Environmental Regulations. The environment is protected through the Environment and Natural Resources
Act (“ENRA”), enacted in 1998, and it’s Regulation, enacted in 2000. These statutes empower the Environment
and Natural Resources Secretary as the policy-making entity and ENRA establishes a duty of care to the
environment and orders the sustainable use of natural resources. Additionally, ENRA introduces the concept of
the Environmental Permit for the handling of certain potentially hazardous or risky materials or performing
certain activities in the environment, such as the construction and operation of power plants (except fuel oil) and
transmission lines.
Material Regulatory Actions. The Energy Charge has been, under current methodology, adjusted every six
months to reflect the spot market price for electricity during the previous six months. However, starting on
January 12, 2011, the energy charge will be adjusted quarterly. Presidential decree 160 was published on
December 23, 2010 and went into effect on January 1, 2011. This decree shortens the Energy Charge reset period
from six months to three months; the new Energy Charge reset dates will be January 12th, April 12th, July 12th
and October 12th instead of April 12th and Oct 12th each year. The reduction of the “energy charge” reset period
reduces the distribution companies’ cash flow exposure before any significant spike in energy prices since the lag
between energy revenues and costs has been reduced by half.
Potential or Proposed Regulations. The Transmission System and Wholesale Market Operating Rules have
been amended to convert the wholesale market price-setting mechanism to be based on audited variable
production costs instead of a competitive bidding process and will become effective in June 2011. However, this
effective date may be delayed due to technical delays necessary for implementation. Again, since electricity costs
are a pass-through for distribution companies, such new regulation will have an indirect benefit to the companies
by providing a stable, marginal cost of electricity.
Nigeria
Structure of Electricity Market. In Nigeria, the state-owned entity, Power Holding Company of Nigeria
(“PHCN”), holds approximately 80% of the electricity market share and private power generating companies
account for the remaining 20%. The power generating companies, of which AES Nigeria Barge Ltd. (“AESNB”)
is one, maintain long-term contracts with PHCN as the sole offtaker.
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All power transmission operations are currently carried out by PHCN. Under new political initiatives and
reforms, as provided under the Roadmap for Power Sector Reforms (“the Power Roadmap”), there are
indications that 11 distribution companies and six generation companies would be fully privatized while the
ownership of the Transmission Company of Nigeria (“TCN”) would be retained by the government, but with
private sector management. Current electricity generation is from either gas-fired or hydro power plants. Most
assets are owned by state-owned companies, though some private investors have been able to establish IPPs
following recent reforms. In addition, the government is developing approximately 4,800 MW of installed
capacity intended to be completed by 2013, known as the National Integrated Power Plants (“NIPPs”). The
Presidential Task Force on Power has announced its intention to privatize the NIPPs in future rounds of
privatization, following completion of construction.
Principal Regulators. The Nigerian Electricity Regulatory Commission (“Nigerian ERC”) is an independent
regulatory agency, that was established under the 2005 Reform Act to undertake both the technical and economic
regulation of the Nigerian electricity sector. It is responsible for general oversight functions, including the
licensing of operators, setting of tariffs and industry standards for future electricity sector development.
Two of the Nigerian ERC’s key regulatory functions are licensing and tariff regulation. Since AESNB
operates under a long-term bilateral agreement with PHCN, it is not subject to the tariff setting process. On the
basis of the current reforms embodied in the Power Roadmap, a number of new regulatory and/or other
governing bodies will be established to regulate the industry.
Principal Regulations. In March 2005, the Nigerian President signed the Electric Power Sector Reform Bill
into law, enabling private companies to participate in transmission and distribution in addition to electricity
generation that had previously been legalized. The government has separated PHCN into eleven distribution
firms, six generating companies, and a transmission company, in preparation for privatization.
Several problems, including union opposition, have delayed the privatization indefinitely, however, in
recent months the current Government has put significant emphasis on completing the privatization of the
eighteen successor companies of the PHCN in 2011. There are clauses in the AESNB PPA that, upon the
effective date of a privatization, require the business to use all reasonable endeavors to obtain and require all fuel
necessary for the operation of the plant. Additionally, the off-taker is envisaged to be transferred from PHCN to
Lagos State. However, no material impact to our operations is expected at this time.
Potential or Proposed Regulations. The Nigerian Government is currently preparing for an election in 2011
and privatization of the electricity sector has been a principal issue emphasized by political parties. The 2005
Reform Act and NERC regulations provide for a generation license to have a duration of 10 years, renewable for
a further five years. This is in line with a current proposal for a uniform tariff for the power sector, MYTO,
which is derived from a building blocks approach that intends a cost-reflective outcome, including a capacity and
an energy component; financing costs and other key costs (operating costs, depreciation) are intended to be
accommodated; and key fluctuating costs (fuel costs, foreign exchange, inflation) are also intended to be
reflected. A total license and uniform tariff duration of 15 years may present challenges to potential investors
given that 15 years may be shorter than the useful life of assets and shorter than the tenor of potential long-term
debt financing. These regulations, if adopted, could make it difficult to acquire or develop new facilities.
Panama
Structure of Electricity Market. In Panama, distribution companies are required to contract 100% of their
annual power requirements (although they can self-generate up to 15% of their demand). Generators can enter
into long-term PPAs with distributors or unregulated consumers. In addition, generators can enter into alternative
supply contracts with each other. The terms and contents of PPAs are determined through a competitive bidding
process and are governed by the Commercial Rules. Besides the PPA market, generators may buy and sell energy
in the spot market. Energy sold in the spot market corresponds to the hourly differences between the actual
dispatch of energy by each generator and its contractual commitments to supply energy. The energy spot price is
36
set by the order in which generators are dispatched. The National Dispatch Center (“CND”) ranks generators
according to their variable cost (thermal) and water value (hydroelectric), starting with the lowest value, thereby
establishing on an hourly basis the merit order in which generators will be dispatched the following day in order
to meet expected demand.
Principal Regulators. The National Secretary of Energy (“SNE”) was created by Law 52 on July 30, 2008;
and has the responsibilities of planning, investigating, directing, supervising and controlling policies of the
energy sector within Panama. With these responsibilities, the Secretariat has defined strategies and policies for
the Republic of Panama, which include promoting energy security for the benefit of the population and the
country’s development, and proposing laws and regulations to the executive agency that promote the
procurement of electrical energy, hydrocarbons and alternative energies in the best conditions for the country.
The regulator of public services, known as the National Authority of Public Services (“ASEP”), was created by
Law 26 on January 29, 1996. ASEP is an autonomous agency of the state, with legal responsibility and self-
patrimony. ASEP is responsible for the control and oversight of public services, such as potable water, sewerage,
electricity, telecommunications and radio and television systems, as well as the transmission and distribution of
natural gas utilities and the companies that provide such services. ASEP’s mission is to ensure the efficient
provision of the public services, as well as national technical, commercial, and environmental quality standards.
Principal Regulations. In the Republic of Panama, the electricity sector is regulated by Law No. 6 issued on
February 1997 which was amended by Law Decree 10 on February 26, 1998, and more recently by Law 57 on
October 2009. The most notable amendments by Law 57 were: (i) generators are now obligated to participate in
public bids for PPAs, to the extent they have available firm capacity and energy, and failure to do so precludes
them from participating in the spot market; (ii) ETESA, as opposed to the distribution companies, will now be
the purchaser in charge of adjudicating PPA bids to the winning generators, subsequently assigning such PPAs to
the corresponding distribution companies; and (iii) the maximum fines which ASEP may impose for violations to
the provisions of the Electricity Law increased from $1 million to $20 million. Resolution AN No. 3885-Elec,
which was approved on October 8, 2010, sets forth the methodology for calculating the capacity and/or energy
that generators must make available for short term bids and long term contracting.
These amendments state that ETESA has to prepare the list of charges, make the call for bids and evaluate
and award contracts for supply in accordance with the parameters, criteria and procedures established by ASEP.
Consequently, ASEP must approve the list of charges produced by ETESA in addition to overseeing the process
to confirm it complies with legal requirements and current regulations.
Environmental Regulations. ASEP issued Resolution AN No. 3932-Elec on October 22, 2010 related to the
Security of Dams in the Electricity Sector. This legislation has sensitive and important Security and
Environmental elements related to: reports, controls by ASEP, protocols for modifications to the structure of the
dams and the operation of dams and reservoirs during floods. This regulation will be effective on November 9,
2011, but it will require a thorough process to review our current action plans during emergencies and protocols
against the requirements of the new law to properly determine the impact to AES Panama. However, the new
requirements may require AES Panama to expend additional amounts which could have a material adverse
impact on our business and results of operations.
Material Regulatory Actions. By virtue of Resolutions AN No. 34-01-Elec on April 1, 2010 and Resolution
AN No. 3852-Elec on September 21, 2010, ASEP declared the Changuinola I project to be of public interest and
urgent necessity (granting AES access to private properties near the project). The owner of one of the Fincas
(land) filed a constitutional action alleging violations of due process and private property rights. The impact to
the business is that if the Supreme Court admits the request, this will automatically suspend the effects of the
ASEP resolution and the project will no longer be of public interest. This could impact AES Panama’s
authorization with regard to the premises and impede progress on the project. AES Panama has requested that the
Supreme Court reject the action filed. For further discussion see Item 3.—Legal Proceedings in this Form 10-K.
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Potential or Proposed Regulations. In July 2010, ASEP hired Consorcio Fundación Bariloche-PSI
Consultores to evaluate alternative allocation of the Charge per Usage of the Principal Transmission System in
order to encourage the development of alternative sources of generation, especially hydropower. The consultants
expect to deliver their final report by mid-January 2011 to ASEP but as of mid-February 2011 the consultants
have not delivered the report. Once ASEP receives the report it is expected to present the amendments to the
current transmission rates for public comment and the amendments are expected to take effect on July 1, 2011.
This could result in a possible reduction of the amounts currently being paid by AES Panama in transmission
rates.
On October 13, 2010, ASEP requested the CND to make an amendment to the weekly programming
methodology so that the hydroelectric dams with a reservoir regulation equal to or less than ninety (90) days
should be modeled as run-of-the-river units with zero variable cost. Under the current regulations, the
Changuinola I Plant is defined as a hydro plant with a reservoir regulation of 7.26 days. The proposed
modification will cause the Changuinola I Plant to be considered as a run-of-the-river plant. It is estimated that
this change could result in a reduction in energy generated by approximately 18 GWh/year for AES Panama,
which is a substantial impact on AES Panama and could have an adverse impact on our businesses and results of
operations. Furthermore, this proposal could change the firm capacity of Changuinola II. Currently, the proposal
is under analysis by ASEP.
North America
Mexico
Structure of Electricity Market. Mexico has a single national electricity grid (referred to as the “National
Interconnected System”), covering nearly all of Mexico’s territory. The only exception is the Baja California
peninsula which has its own separate electricity system. Article 27 of the Mexican Constitution reserves the
generation, transmission, transformation, distribution and supply of electric power exclusively to the Mexican
State for the purpose of providing a “public service.”
In Mexico, since 1995 the power sector legal framework partially opened to private entities under the
following schemes: cogeneration; self supply; IPP exports; and imports for self consumption. Private investments
are allowed today in this sector in the following areas: transport, storage, and distribution. The Energy
Regulatory Commission (“CRE”) is in charge of issuing the permits related to the activities from the power and
natural gas sectors that were open to private investment since 1995.
Principal Regulators. The Federal Electricity Commission (“CFE”), by virtue of Article 1 of the Energy
Law, is granted sole and exclusive responsibility for providing this public service as it relates to the supply,
transmission and distribution of electric power.
Principal Regulations. In 1992, the Energy Law was amended to allow private parties to invest in certain
activities in the Mexico electrical power market, under the assumption that “self-supply” generation of electric
power is not considered a public service. These reforms allowed private parties to obtain permits from the
Ministry of Energy for (i) generating power for self-supply; (ii) generating power through co-generation
processes; (iii) generating power through independent production; (iv) small-scale production; and (v) importing
and exporting electrical power. Beneficiaries holding any of the permits contemplated under the Energy Law are
required to enter into PPAs with the CFE with regard to all surplus power produced. It is under this basis that
AES’ Mérida and TEG/TEP facilities operate. Mérida provides power exclusively to CFE under a long-term
contract. TEG/TEP provides the majority of its output to two offtakers under long-term contracts, and can sell
any excess or surplus energy produced to CFE at a predetermined day-ahead price.
Environmental Impact. When works or activities that may disrupt the ecological balance or exceed the limits
and conditions established in the applicable laws or the regulations are proposed, these activities shall be subject
38
to the conditions established by regulatory authorities, for the purposes of reducing to a minimum the negative
effects on the environment. In these cases, it is necessary to first obtain the authorization on environmental
impact matters from the regulatory authorities.
In addition, high risk activities are also regulated even though they do not define specifically what is meant
by “high risk.” The Mexican Department of the Interior issued two lists defining high risk substances. The
criteria used to determine whether an activity is of high risk, is based in the characteristics or volume of the
substance used, where relevant. If in the event of being spilt or released it is liable to cause an explosion or
significantly affect the environment, people or property, it will be considered as of ‘high risk’. Further, if a
project contemplates the use of a compound included in the lists issued by the regulator, in the necessary
volumes, the interested Party must present a Risk Evaluation before the regulator.
Environmental Sanctions. The Attorney General’s Office for the Protection of the Environment is in charge
of enforcing environmental legal provisions in Mexico. The sanctions that may be imposed depend on the
environmental obligations that are not observed by individuals or corporations, and vary from fines ranging from
the equivalent of 50 and up to 50,000 days of minimum wage. Additional sanctions may also be imposed,
including the annulment of environmental permits and authorizations, partial or total closures of a facility, and
administrative arrest.
Mexican Legislation provides that the energy sector is integrated by the Electrical and Petroleum sectors.
Federation is the only one entitled to extract and process fossil fuels, as well as to generate electricity; however,
certain exceptions apply.
Renewable Energy. On October 23, 2008, a proposal for the approval of the Renewable Energies and
Financing of the Energy Transition Law was sent for the approval of the Mexican House of Representatives, and
on October 25, 2008, this same proposal was approved by the Energy Committee of the same House. The law
encourages generation and transportation of energy generated by renewable sources, giving certainty and lower
costs to provide incentives to participate in the private sector of this field.
In addition, the Federal government’s all-encompassing Special Program on Climate Change (“SPECC”)
was formally approved. The SPECC provides a program to reduce the alleged effects of climate change. The
principal actions proposed to achieve competitive levels, include the gradual substitution of oil for natural gas in
the national energy mix, stimulating the implementation of cogeneration and other efficiency saving technologies
and strongly stimulating the development of renewable energies.
Priority will be given to electricity generation from wind (up to 507 MW installed by 2012), geothermal
energy (153 MW installed by 2012), hydroelectric and solar power. The SPECC proposes a joint program
between public bodies and private investors in order to increase the amount of electricity generation capacity
from renewable sources up to 1,957 MW by 2012.
The SPECC makes it clear that many of its objectives will be achieved through the following normative,
economic and market instruments: accessible financing mechanisms; simplification procedures for permitting;
facilitation of electrical grid interconnection and transmission contracts; and stimulus for private investment in
energy infrastructure. Our businesses in Mexico are still reviewing the impact of these developments on their
operations; however, they could be material to the business and results of operations.
United States
Structure of Electricity Market. The United States wholesale electricity market consists of multiple distinct
regional markets that are subject to both federal regulation, as implemented by the FERC, and regional regulation
as defined by rules designed and implemented by the Independent System Operators (“ISO”). These rules for the
most part govern such items as the determination of the market mechanism for setting the system marginal price
39
for energy and the establishment of guidelines and incentives for the addition of new capacity. The current
regulatory framework in the United States is the result of a series of regulatory actions that have taken place over
the past two decades, as well as numerous policies adopted by both the federal government and the individual
states that encourage competition in wholesale and retail electricity markets.
Principal Regulators. The federal government, through regulations promulgated by FERC, has primary
jurisdiction over wholesale electricity markets and transmission services. While there have been numerous
federal statutes enacted during the past 32 years, including the Public Utility Regulatory Policy Act of 1978
(“PURPA”), the Energy Policy Act of 1992 (“EPAct 1992”) and the Energy Policy Act of 2005 (“EPAct 2005”),
there are two fundamental regulatory initiatives implemented by FERC during that time frame that directly
impact our United States businesses:
• FERC approval of market-based rate authority beginning in 1986 for many providers of wholesale
generation; and
• FERC issuance of Order #888 in 1996 mandating the functional separation of generation and
transmission operations and requiring utilities to provide open access to their transmission systems.
FERC has civil penalty authority over violations of any provision of Part II of the Federal Power Act
(“FPA”) which concerns wholesale generation or transmission, as well as any rule or order issued thereunder.
FERC is authorized to assess a maximum civil penalty of $1 million per violation for each day that the violation
continues. The FPA also provides for the assessment of criminal fines and imprisonment for violations under Part
II of the FPA. This penalty authority was enhanced in EPAct 2005. With this expanded enforcement authority,
violations of the FPA and FERC’s regulations could potentially have more serious consequences than in the past.
Pursuant to EPAct 2005, the North America Reliability Corporation (“NERC”) has been certified by FERC
as the Electric Reliability Organization (“ERO”) to develop mandatory and enforceable electric system reliability
standards applicable throughout the United States to improve the overall reliability of the electric grid. These
standards are subject to FERC review and approval. Once approved, the reliability standards may be enforced by
FERC independently, or, alternatively, by the ERO and regional reliability organizations with responsibility for
auditing, investigating and otherwise ensuring compliance with reliability standards, subject to FERC oversight.
Monetary penalties of up to $1 million per day per violation may be assessed for violations of the reliability
standards.
Principal Regulations for Generation Businesses. Several of our generation businesses in the United States
currently operate as Qualifying Facilities (“QFs”) as defined under PURPA. These businesses entered into long-
term contracts with electric utilities that had a mandatory obligation at that time, as specified under PURPA, to
purchase power from QFs at the utility’s avoided cost (i.e., the likely costs for both energy and capital investment
that would have been incurred by the purchasing utility if that utility had to provide its own generating capacity
or purchase it from another source). EPAct 2005 later amended PURPA to provide for the elimination of the
mandatory purchase obligation in certain markets, but did so only on a prospective basis. Cogeneration facilities
and small power production facilities that meet certain criteria can be QFs. To be a QF, a cogeneration facility
must produce electricity and useful thermal energy for an industrial or commercial process or heating or cooling
applications in certain proportions to the facility’s total energy output, and must meet certain efficiency
standards. To be a QF, a small power production facility must generally use a renewable resource as its energy
input and meet certain size criteria.
Our non-QF generation businesses in the United States currently operate as Exempt Wholesale Generators
(“EWGs”) as defined under EPAct 1992. These businesses were historically exempt from the Public Utility
Holding Company Act of 1935 and are also exempt from the Public Utility Holding Company Act of 2005
(“PUHCA 2005”), and, subject to FERC approval, have the right as public utilities under the FPA to sell power
at market-based rates, either directly to the wholesale market or to a third-party offtaker such as a power
marketer or utility/industrial customer. Under the FPA and FERC’s regulations, approval from FERC to sell
40
wholesale power at market-based rates is generally dependent upon a showing to FERC that the seller lacks
market power in generation and transmission, that the seller and its affiliates cannot erect other barriers to market
entry and there is no opportunity for abusive transactions involving regulated affiliates of the seller. To prevent
market manipulation, FERC requires sellers with market-based rate authority to file certain reports, including a
triennial updated market power analysis for markets in which they control certain threshold amounts of
generation.
Principal Regulations for Traditional Utility Business. In addition to our generation businesses, we also own
IPL, a vertically integrated utility located in Indiana. A description of the regulatory environment under which
IPL operates is provided below:
IPL. As a regulated electric utility, IPL is subject to regulation by the FERC and the Indiana Utility
Regulatory Commission (“IURC”). As indicated below, the financial performance of IPL is directly impacted by
the outcome of various regulatory proceedings before the IURC and FERC.
IPL is subject to regulation by the IURC with respect to the following: its services and facilities; the
valuation of property; the construction, purchase or lease of electric generating facilities; the classification of
accounts; rates of depreciation; retail rates and charges; the issuance of securities (other than evidences of
indebtedness payable less than twelve months after the date of issue); the acquisition and sale of some public
utility properties or securities; and certain other matters.
IPL’s tariff rates for electric service to retail customers (basic rates and charges) are set and approved by the
IURC after public hearings (“general rate cases”). General rate cases, which have occurred at irregular intervals,
include the participation of consumer advocacy groups and certain customers. The last general rate case for IPL
was completed in 1995. In addition, pursuant to statute, the IURC is to conduct a periodic review of the basic
rates and charges of all Indiana utilities at least once every four years, but the IURC has the authority to review
the rates of any Indiana utility at any time it chooses. Such reviews have not been subject to public hearings.
The majority of IPL customers are served pursuant to retail tariffs that provide for the monthly billing or
crediting to customers of increases or decreases, respectively, in the actual costs of fuel (including purchased
power costs) consumed from estimated fuel costs embedded in basic rates, subject to certain restrictions on the
level of operating income. These billing or crediting mechanisms are referred to as “trackers.” This is significant
because fuel and purchased power costs represent a large and volatile portion of IPL’s total costs. In addition,
IPL’s rate authority provides for a return on IPL’s investment and recovery of the depreciation and operation and
maintenance expenses associated with certain IURC-approved environmental investments. The trackers allow
IPL to recover the cost of qualifying investments, including a return on investment, without the need for a
general rate case.
IPL may apply to the IURC for a change in its fuel charge every three months to recover its estimated fuel
costs, including the energy portion of purchased power costs, which may be above or below the levels included
in its basic rates and charges. IPL must present evidence in each fuel adjustment charge (“FAC”) proceeding that
it has made every reasonable effort to acquire fuel and generate or purchase power, or both, so as to provide
electricity to its retail customers at the lowest cost reasonably possible.
Independent of the IURC’s ability to review basic rates and charges, Indiana law requires electric utilities
under the jurisdiction of the IURC to meet operating expense and income test requirements as a condition for
approval of requested changes in the FAC. Additionally, customer refunds may result if IPL’s rolling twelve-
month operating income, determined at quarterly measurement dates, exceeds IPL’s authorized annual
jurisdictional net operating income and there are not sufficient applicable cumulative net operating income
deficiencies against which the excess rolling twelve-month jurisdictional net operating income can be offset.
In IPL’s ten most recently approved FAC filings (FAC 81 through 90), the IURC found that IPL’s rolling
annual jurisdictional retail electric net operating income was lower than the authorized annual jurisdictional net
41
operating income. FAC 90 includes the twelve months ended October 31, 2010. In IPL’s FAC 76 through 80
filings, the IURC found that IPL’s rolling annual jurisdictional retail electric net operating income was greater
than the authorized annual jurisdictional net operating income. Because IPL has a cumulative net operating
income deficiency, IPL was not required to make customer refunds in its FAC proceedings.
In December 2007, IPL received a letter from the staff of the IURC requesting information relevant to the
IURC’s periodic review of IPL’s basic rates and charges and IPL subsequently provided information to the staff.
Since IPL’s cumulative net operating income deficiency (described above) requires no customer refunds in the
FAC process, the IURC staff was concerned that the higher-than-usual 2007 earnings may continue in the future.
In response to the inquiry, IPL provided voluntary credits to its retail customers totaling $32 million. IPL
recorded a $30 million deferred fuel regulatory liability in March 2008 and a $2 million deferred fuel regulatory
liability in June 2008, with corresponding and respective reductions against revenues for these voluntary credits.
All of these credits have been applied in the form of offsets against fuel charges that customers would have
otherwise been billed during June 1, 2008 through February 28, 2009.
Over the past few years, IPL has received correspondence from the IURC on a few occasions expressing
concern for IPL’s level of earnings and inquiring about IPL’s depreciation rates. In response, IPL provided
additional information to the IURC relevant to IPL’s earnings as well as the results of a depreciation analysis that
IPL conducted. In the fourth quarter of 2010, IPL received a letter from the IURC stating that they did not have
any additional questions.
IPL is a member of the Midwest Independent System Operator, Inc. (“Midwest ISO”). Midwest ISO serves
as the third-party operator of IPL’s transmission system and runs the day-ahead and real-time Energy Market
and, beginning in January 2009, the Ancillary Services Market for its members.
IPL transferred functional control of its transmission facilities to the Midwest ISO and its transmission
operations were integrated with those of the Midwest ISO. IPL’s participation and authority to sell wholesale
power at market-based rates are subject to the FERC jurisdiction. Transmission service over IPL’s facilities is
now provided through the Midwest ISO’s tariff.
As a member of the Midwest ISO, IPL offers its generation and bids its demand into the markets operated
by the Midwest ISO on an hourly basis. The Midwest ISO settles energy hourly offers and bids based on
locational marginal prices, which is pricing for energy at a given location based on a market clearing price that
takes into account physical limitations, generation and demand throughout the Midwest ISO region. The Midwest
ISO evaluates the market participants’ energy offers and demand bids optimizing for energy products to
economically and reliably dispatch the entire Midwest ISO system. The Company has certain regulatory assets
on its balance sheet relating to IPL’s participation in the Midwest ISO. The IURC has authorized IPL to recover
the fuel portion of its costs from the Midwest ISO, to defer certain operational, administrative and other costs
from the Midwest ISO and seek recovery in IPL’s next basic rate case proceeding. Total Midwest ISO costs
deferred by IPL as long-term regulatory assets were $71.0 million and $62.8 million as of December 31, 2010
and December 31, 2009, respectively. IPL will seek to recover the deferred costs in its next basic rate case
proceeding; however, there can be no assurance that IPL would be successful in that regard.
Beginning in 2007, Midwest ISO transmission owners, including IPL, began to share the costs of
transmission expansion projects with other transmission owners after such projects were approved by the
Midwest ISO Board of Directors. Upon approval by the Midwest ISO Board of Directors, the transmission
owners must make a good-faith effort to build the projects. Costs allocated to IPL for the projects of other
transmission owners are collected by the Midwest ISO per their tariff. We believe it is probable, but not certain,
that IPL will ultimately be able to recover from its customers the money it pays to the Midwest ISO for its share
of transmission expansion projects of other utilities, but such recovery is subject to IURC approval in IPL’s next
basic rate case. Therefore, such costs to date have been deferred as long-term regulatory assets. To date, such
costs have not been material to IPL. However, given the magnitude of the costs anticipated to enable
conformance with renewables mandates in the Midwest ISO footprint, it is probable that such costs will become
42
material in the next few years. Our current estimates are that IPL’s share of such costs could be more than $50
million annually by 2020 and continue increasing after that.
In 2004, the IURC initiated an investigation to examine the overall effectiveness of Demand-Side
Management (“DSM”) programs throughout the State of Indiana and to consider any alternatives to improve
DSM performance statewide. On December 9, 2009, the IURC issued a Generic DSM Order that found that
electric utilities subject to its jurisdiction must meet an overall goal of annual cost-effective DSM programs that
reduce retail kWh sales (as compared to what sales would have been excluding the DSM programs) of 2% per
year by 2019 (beginning in 2010 at 0.3% and growing to 2.0% in 2019 subject to certain adjustments). The IURC
also found that all jurisdictional electric utilities have to participate in five initial, statewide core DSM programs,
which will be administered by a Third-Party Administrator. Consequently, IPL’s DSM spending, both capital and
operating, will increase significantly going forward, which will likely reduce IPL’s retail energy sales and the
associated revenues.
Prior to the issuance of the Generic DSM Order, IPL filed a petition seeking relief for substantive DSM
programs. IPL proposed a DSM plan to be considered in two phases. The first phase (“Phase I”) sought recovery
for traditional-type DSM programs, such as residential home weatherization and energy efficiency education
programs, with additional offerings. The IURC issued an Order in February 2010 that approved the programs
included in IPL’s Phase I request. In addition to IPL’s traditional recovery of the direct costs of the DSM
program, the Order also included performance-based incentives. The second phase (“Phase II”) sought recovery
for “Advanced” DSM programs and was coincident with IPL’s application for a smart grid funding grant from
the Department of Energy. The “Advanced” DSM programs included an Advanced Metering Infrastructure
communication backbone as well as two-way meters and home area network devices for certain of IPL’s
customers. In February 2010, the IURC issued an Order that approved IPL’s Phase II program, but denied IPL’s
request to timely recover its expenditures. Instead, IPL would need to seek recovery of the costs incurred under
its Phase II program during its next basic rate case proceeding.
In June 2010, IPL filed a petition with the IURC seeking authority for an additional DSM program and to
recover the lost revenue resulting from decreased kWh consumption and kW demand beginning on June 11, 2010
as a result of the implementation of all approved DSM programs. The IURC granted IPL’s request related to the
additional DSM program, but denied the request to recover lost revenue. Additionally, in October 2010, IPL filed
a petition with the IURC for approval of its plan to comply with the IURC’s Generic DSM Order, which petition
includes estimated DSM spending of approximately $65 million from 2011 to 2013. It is not possible to predict
at this time what the IURC’s response will be to this petition.
The American Recovery and Reinvestment Act of 2009 includes various provisions that fund the
development of the electric power industry at the federal and state level. These provisions include, but are not
limited to, improving energy efficiency and reliability; electricity delivery (including smart grid technology);
energy research and development; renewable energy; and demand response management. IPL submitted a Smart
Grid Investment Grant for $20 million to provide its customers with tools to help them more efficiently use
electricity and also to upgrade its delivery system infrastructure. IPL’s application was approved and the
agreement with the United States Department of Energy was executed in April 2010.
Environmental Regulations. See “Environmental and Land Use Regulations” below for a description of the
United States Environmental Regulations.
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Europe, Middle East & Asia
Europe
European Union
Structure of Electricity Market. All European Union (“EU”) member states are required to implement EU
legislation, although there is a degree of disparity as to how such legislation is implemented and the pace of
implementation in the respective member states. EU legislation covers a range of topics which impact the energy
sector, including market liberalization and environmental legislation.
The Company has subsidiaries which operate existing generation businesses in a number of countries which
are member states of the EU, including the Czech Republic, Hungary, the Netherlands, Spain and the United
Kingdom. The Company also has subsidiaries which are in the process of commissioning a generation plant in
Bulgaria. Bulgaria became a member state of the EU as of January 1, 2007.
Principal Regulations. The principles of market liberalization in the EU electricity and gas markets were
introduced under the 2003 Electricity and Gas Directives. In 2005, the European Commission (the
“Commission”) launched a sector-wide inquiry into the European gas and electricity markets. To tackle the
issues identified in the inquiry and to further improve the regulatory framework for energy liberalization, the
Commission launched the Third Energy Package in 2007. In the context of the electricity market, the inquiry has
to date focused on identifying issues related to price formation in the electricity wholesale markets and the role of
long-term agreements as a possible barrier to entry with a view to improving the competitive situation. In January
2007, the Commission published a proposal for a new common energy policy for Europe. In November 2008, the
Commission published a non-binding second Strategic Energy Review aimed at developing the concept of a
common European energy policy. It focused mainly on security of supply and infrastructure development. The
Strategic Energy Review proposed reviews of the Gas Storage Directive in 2010 and an update of the Oil Stocks
Directives.
In October 2008, the Energy Ministers reached political agreement on the “Third Liberalization Package,”
which includes five pieces of legislation, Electricity and Gas Directives, Electricity and Gas Regulations and a
Regulation creating a new Agency for the Coordination of Energy Regulators, which will have limited powers to
deal with cross-border interconnectors and related issues. This legislation was formally adopted in August 2009
and must be implemented on a national level by March 2011.
Environmental Regulations. See “Environmental and Land Use Regulations—International” below for a
description of these directives.
Bulgaria
Structure of Electricity Market. The Bulgarian energy sector model allows for trading at regulated prices, at
freely negotiated prices between parties or on the organized market. Since an organized market has not evolved
yet despite the availability of adequate legislative framework for it, the primary means for wholesale trading is
the regulated market, the bilateral transactions market and the Electricity Balancing Mechanism. These
arrangements are also supplemented by an imbalance settlement regime.
The Bulgarian power market has evolved from a system where the National Electricity Company (“NEK”),
established in November 1991 as a fully state-owned vertically integrated utility, was responsible for the entire
cycle of generation, transmission and distribution. After a decade of functioning in this role, NEK was vertically
unbundled with a resulting legal separation of generation, transmission and distribution assets into different
operating entities. While these structural reforms greatly helped create a competitive electricity sector, there are
no actual trading rules to enable the market to operate freely. To ensure accessible customer prices and support to
renewable energy supply (“RES”) producers and the highly efficient cogeneration assets, NEK is still acting as
single buyer, purchasing the majority of power generated in Bulgaria and then selling the power to distribution
companies or to transmission network-connected consumers or to export across interconnectors (as the sole
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licensed Bulgarian power exporter). NEK also owns the biggest hydro-electric and pump storage generation
facilities in Bulgaria.
While the transmission system in Bulgaria remains under NEK’s formal ownership, to comply fully with
EU legislation, NEK has spun-off transmission operations (i.e., system operation, balancing market
administration and systems’ operation and maintenance) to the Electricity System Operator. The system also
allows for a regulated third-party access.
Principal Regulators. The State Energy and Water Regulatory Commission (“SEWRC”) established in 1999
is the independent regulator for both the energy and water markets. SEWRC’s key responsibilities are:
• Licensing activities in the electricity, heat and natural gas sectors;
• Regulating electricity, heat and natural gas prices (including those from RES and CHP power sources);
• Regulating interconnection to distribution and transmission networks; and
• Issuing of certificates of origin and green certificates for the electricity produced from RES and
co-generation.
Principal Regulations. Bulgaria is at a juncture of adopting legislative packages that cover three key
European policy goals—energy independence (Directive 2009/28/EC), environmental sustainability through
GHG emissions control (Directive 2009/29/EC) and market liberalization (Directive 2009/72/EC). In line with
these EU-mandated goals, the government of Bulgaria has set the following key priorities: a 20% reduction of the
energy intensity of GDP by 2013 and a 50% reduction by 2020; increased renewables share of the total energy
consumption to 12% by 2013 and to a minimum of 16% by 2020; and competitive energy market through
promoting new generation entry, security of supply, and sustainable development. A key milestone would be a
30% increase of bilateral contracts in the electricity market by 2013.
A key law that sets the stage for the above priorities is the Bulgarian Energy Act developed in 2004 (the
“BEA”) with a view to a transparent and predictable regulatory environment to promote further liberalization
through an independent regulatory authority. The BEA creates a framework for viable commercial companies in
the sector through more investment, greater autonomy of SERWC and more effective commercial restructuring.
The BEA is structured so that the market can shift away from the single-buyer model into a more market-oriented
third-party network access model that allows for trading at regulated or freely negotiated prices, as well as at a
free market exchange. To be in full compliance with the EU Third Energy Package, the BEA is being amended in
order for the electricity market to be fully liberalized under clear regulatory rules and sustainable market
mechanisms. Recent amendments to the BEA are making clear the commitment of the government to honoring
long-term contracts for power purchasing with generators whose investments have helped upgrade the national
asset base.
To help further develop the energy market, the SERWC developed new Trading Rules, adopted in the
summer of 2010, where generators, consumers and grid operators are organized in balancing groups for the most
cost-effective balance between energy supply and consumption. An underlying principle of the Trading Rules
will be the presence of a “Day-ahead” market (a departure from the existing practice of weekly notification
schedules). Importantly, the Trading Rules will also establish the principles for the Bulgarian power exchange,
all in line with the EU’s Third Energy Liberalization legislation.
Environmental Regulations. The main environmental regulations reflect the implementation of EU

environmental directives. As of January 2007, Bulgaria is introducing EU Emissions Trading Scheme (“ETS”) as
the main mechanism for meeting Kyoto Protocol GHG reduction commitments. The Bulgarian Environmental
Protection Act amended on September 27, 2005, and all secondary legislation following from it, have
incorporated all EU and Kyoto emission reduction commitments. The Bulgarian National Allocation Plan
(“NAP”) allows a total of 42.3 million tonnes of CO2 for the whole volume of fossil fuel-based generation in the
country. The AES Galabovo coal-based power plant will be covered by the NAP at 80% of its projected
45
generation for 2011 and 2012. The portion of CO2 allowances which are not covered by NAP will be billed
directly to NEK.
Bulgaria is also subject to the Large Combustion Plant Directive (2001/80/EC) (“LCPD”), which aims to
reduce particulate emissions by controlling SO2, NOX and dust from large combustion plants. The LCPD allows
for existing plants to opt for exemption from the emission level values, as long as the operator undertakes not to
operate for more than 20,000 hours starting from January 1, 2008 and ending no later than December 31, 2015.
Major rehabilitation work has been taking place across units of various Bulgarian thermal power plants in the last
decade. The rehabilitated Maritza East 2 complex is now fitted with electrical filters for capturing dust and Flue
Gas Desulphurisation (“FGD”) units (more than 94% efficiency). The AES Galabovo power plant, which is
currently in the process of commissioning, is equipped with a state-of-the-art wet FGD system that ensures 98%
of SO2 removal.
Bulgaria is dependent on foreign imports for 70% of its primary fuel sources, which makes exploration of
renewable energy sources paramount for the country’s achievement of energy independence and environmental
objectives. Bulgaria’s EU-mandated renewable targets have been met mostly by hydro power plants with limited
contribution to the fuel mix by wind energy and even less from biomass. The main goal of the Renewable and
Alternative Energy Sources and Biofuels Act of 2007 is to encourage generation from and grid interconnection of
installations utilizing renewable energy sources.
Material Regulatory Actions. In connection with Bulgaria’s accession into the EU, the European
Commission (the “Commission”) has opened an investigation into alleged anti-competitive behavior and possible
restrictions of competition in the Bulgarian electricity markets. The current focus of the Commission’s
investigation is NEK. As part of its investigation, the Commission is attempting to determine whether NEK’s
long-term contracts are anti-competitive, including its long-term PPAs with AES’ Bulgarian entities, AES
Maritza East and AES Geo Energy. Accordingly, the Commission has issued separate information requests to
AES Maritza and AES Geo Energy about their respective PPAs with NEK. While these particular requests were
voluntary, both AES Maritza and AES Geo Energy have cooperated in good faith with the Commission, have
provided the requested information and have met with the Commission in order to provide background and any
further required information about the projects. The Commission has clearly specified that neither AES Maritza
nor AES Geo Energy were the target of the investigation. We believe the Commission is partly concerned that
long-term PPAs could pose a problem with respect to the liberalization of Bulgaria’s electricity markets but we
believe that the projects and their respective PPAs did not tie up capacity but created capacity that would not
otherwise exist. However, if the Commission determined that PPAs are anti-competitive, they could take actions
up to and including termination of our PPA, which could have a material adverse impact on AES Maritza and our
results of operations and financial condition.
Potential or Proposed Regulations. The AESB Act referred to above is currently being amended in order to
better incorporate the EU principles set forth in Directive 2009/29/EC. Recent draft amendments to the AESB
Act ensure predictability for off-take tariffs for wind project investments that have been undertaken in the last
several years (including the AES-owned Saint Nikola Wind Farm) as well as create new development
opportunities for solar power, including the new solar power projects in the Bulgaria pipeline of AES Solar.
Czech Republic
Structure of Electricity Market. In accordance with EU directives regarding market liberalization, all
electricity customers in the Czech Republic are able to select their energy supplier. Since August 2007, the
Prague Energy Exchange has been trading energy in the form of base load and peak load on a monthly, quarterly
and annual basis. The majority of electricity is, however, still traded on a bilateral contract basis between
generators and distributors, independent traders and also between generators and final customers. In February
2008, a day-ahead spot market was incorporated into the Prague Energy Exchange. Another important entity
active in the energy sector is OTE, which is responsible for: processing and reporting business balance of
electricity according to data supplied by electricity market participants; organization of short-term markets and
46
the balancing market by regulating energy in cooperation with transmission system operator; and evaluation and
settlement of imbalances between the agreed and actual electricity supplies and consumption.
Principal Regulators. The Energy Regulatory Office regulates the energy sector by granting permits for
businesses in the energy sector. The main tasks of the Energy Regulatory Office are: supporting competition,
supporting the use of renewable and secondary energy resources, and protection of consumer interests in
monopolistic markets.
Principal Regulations. The principal regulations are those which implement EU regulations. The energy
activities are regulated mainly by Act No. 458, as amended, which provides the conditions for business activity,
the exercise of public administration and nondiscriminatory regulation in the energy sectors, including the
electricity, gas and heat sectors, as well as the rights and obligations of individuals and legal entities related
thereto, in compliance with the law of the European Communities. The other principal law is Act No. 180/2005
Coll., as amended, on the promotion of electricity production from renewable energy sources which regulates, in
accordance with the legislation of the European Communities, the method of promoting the production of
electricity from renewable energy sources and from mining gas from closed mines, the performance of state
administration and the rights and obligations of natural and legal persons connected therewith. The methodology
of price control in each line of business is governed by Regulation No. 438/2001 (as amended) which regulates
the procedures for price control in the energy sector. The revenue cap regulatory method has been selected for
electricity transmission and distribution activities. Actual regulated fees associated with transmission and
distribution as fees for capacity payments, network usage, renewable subsidies in the form of feed-in tariffs or
green bonuses and system services charges, are actualized annually in the relevant price decision issued by the
Energy Regulatory Office. The gradual liberalization of the electricity market made all customers eligible
customers and trading is not subject to regulation. Energy activities are also governed by the corresponding
technical regulations and standards.
Environmental Regulations. The principal environmental regulations are the Pollution Prevention and
Control Regulations 76/2002 Coll. These regulations introduce a pollution control system known as Pollution
Prevention and Control (“PPC”). AES Bohemia is subject to air pollution control and is regulated by the
Regional Environmental Authority. The key concept of the regulations concerns the application of Best Available
Techniques (“BAT”) in order to prevent pollution. The PPC regime requires installations operating certain
activities to apply for a permit to operate. The PPC permit contains conditions on: waste management; material
storage and handling; releases to air, water and land; environmental management techniques; accident prevention
and control; monitoring, reporting and record-keeping; and site decommissioning.
Material Regulatory Actions. During 2010, as a result of a feed-in tariff for solar plants, the Czech Republic
experienced a boom in solar installation tripling installed capacity from January 1, 2010. This forced the
government to introduce new measures for solar plants to limit the future support to only smaller installations,
reduce feed-in tariffs and implement a new tax regime. However, solar installation has already significantly
affected the grid by making any development of new projects more difficult due to limited free capacity in the
grid. In addition, the government decided to introduce a gift tax on free allocated CO2 credits to electricity
generators to generate additional resources for financing renewable electricity in the future and to protect
electricity customers, at least partly, from a major increase in the regulated fee for the support of renewable
electricity. Although the law stipulates that the CO2 gift tax should not be paid from cogeneration electricity, it is
assumed now that the AES Bohemia tax duty may exceed $1.5 million payable in the first quarter of 2011. The
final regulation, which will provide calculations of the gift tax for cogeneration producers has not been issued
yet.
Hungary
Structure of Electricity Market. The Hungarian market has one main interconnected system. The state-
owned electricity wholesaler, MVM, is the dominant exporter, importer and wholesaler of electricity. MVM’s
affiliated company, MAVIR, is the Hungarian transmission system operator. Currently, Hungary is dependent on
47
energy imports (mainly from Russia) since domestic production only partially covers consumption. The
wholesale market is legally liberalized, although it remains dominated by MVM due to MVM’s access to and
control over a significant portion of the Hungarian generating facilities. The spot market is relatively illiquid with
trading dominated by over-the-counter or bilateral contracts. Relative to more western parts of Europe, the
volumes traded are smaller and typically for shorter durations, although contracts with a duration that is greater
than one year are available.
Principal regulators. Magyar Energia Hivatal (“MEH”) is the government entity responsible for regulation
of the electricity industry in Hungary. The Ministry of National Development oversees the activities of the MEH.
Principal Regulations. The main regulations in Hungary are those being implemented under EU directives,
the adoption of the Hungarian Electricity Act in 2007, which became effective January 1, 2008, was the final
legislative step to implement a fully liberalized electricity market. By virtue of the Hungarian Electricity Act, all
customers are eligible to choose their electricity supplier. In the competitive market, generators sell capacity to
wholesale traders, distribution companies, other generators, electricity traders and eligible customers at an
unregulated price. In the light of the third energy liberalization package issued by the EU in 2009, Hungary is
planning to implement a major amendment of the Electricity Act and the Gas Act which will conform to the EU
package.
Environmental Regulations. The main environmental permit is the Integrated Pollution Prevention Control
(“IPPC”). The IPPC Directive is based on several principles, namely (i) an integrated approach, (ii) BAT,
(iii) flexibility and (iv) public participation. The integrated approach means that the permits must take into
account the whole environmental performance of the plant, covering, e.g., emissions to air, water and land,
generation of waste, use of raw materials, energy efficiency, noise, prevention of accidents and restoration of the
site upon closure. The purpose of the Directive is to ensure a high level of protection of the environment taken as
a whole. The permit conditions including emission limit values must be based on Best Available Techniques
(“BAT”) as defined in the IPPC Directive. To assist the licensing authorities and companies to determine BAT,
the Commission organizes an exchange of information between experts from the EU Member States, industry
and environmental organizations. This work is coordinated by the European IPPC Bureau of the Institute for
Prospective Technology Studies at the EU Joint Research Centre in Seville, Spain. This results in the adoption
and publication by the Commission of the BAT Reference Documents (the “BREFs”). The IPPC Directive
contains elements of flexibility by allowing the licensing authorities, in determining permit conditions, to take
into account the technical characteristics of the installation, its geographical location and the local environmental
conditions. Finally, the Directive ensures that the public has a right to participate in the decision-making process,
and to be informed of its consequences, by giving the public access to permit applications in order to provide
their opinions, permits, results of the monitoring of releases and the European Pollutant Release and Transfer
Register (“E-PRTR”). E-PRTR provides emission data reported by Member States accessible in a public register,
which is intended to provide environmental information on major industrial activities. E-PRTR has replaced the
previous EU-wide pollutant inventory, the so-called European Pollutant Emission Register.
Material Regulatory Actions. Shortly before its accession to the EU, the Hungarian government notified the
Commission of arrangements concerning compensation to the state-owned electricity wholesaler MVM. The
Commission decided to open a formal investigation in 2005 to determine whether any government subsidies were
provided by MVM to its suppliers which were incompatible with the common market. In June 2008, the
Commission reached its decision that these PPAs, including AES Tisza’s PPA, contain elements of illegal state
aid. The decision required MVM to terminate the PPAs within six months of the June 2008 decision, and to
recover the alleged illegal state aid from the generators by April 2009. AES Tisza is challenging the
Commission’s decision in the Court of First Instance of the European Communities. Referring to the
Commission’s decision, Hungary adopted act number LXX of 2008 which terminates all long-term PPAs in
Hungary, including AES Tisza’s PPA, as of December 31, 2008, and requires generators to repay the alleged
illegal state aid that was allegedly received by the generators through the PPAs, and provides for the possibility
to offset the generators stranded costs from the repayable state aid. The MEH issued its Resolution No. 342/2010
pursuant to which it stated AES Tisza did not receive illegal state aid.
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At the end of 2006 and for all of 2007, the Hungarian government reintroduced administrative pricing for all
electricity generators, overriding PPA pricing, including the pricing in AES Tisza’s PPA. In January 2007, AES
Summit Generation Limited (“AES Summit”), a holding company associated with AES Tisza’s operations in
Hungary, and AES Tisza notified the Hungarian government of a dispute concerning its acts and omissions
related to AES’ substantial investments in Hungary in connection with the reintroduction of the administrative
pricing for Hungarian electricity generators. In conjunction with this, AES Summit and AES Tisza have
commenced International Centre for Settlement of Investment Disputes (“ICSID”) arbitration proceedings
against Hungary under the Energy Charter Treaty in connection with Hungary’s reintroduction of the
administrative pricing for Hungarian electricity generators. In the meantime, pursuant to the new Electricity Act
in force from January 1, 2008, administrative pricing for electricity generators was subsequently abolished. The
ICSID arbitration panel issued the final determination on September 23, 2010 pursuant to which AES’ claim was
dismissed. AES is in the process of analyzing the determination and the potential legal remedies.
In 2008, Hungary introduced a special tax to be levied on energy companies including companies such as
AES Tisza. The rate of the special tax was 8% and, in 2010, was extended until 2013. Hungary also introduced a
further tax on certain industries, including energy companies (the “Crisis Tax”). The rate of the Crisis Tax for
energy companies is 1.05% of the net sales revenues.
Spain
Structure of Electricity Market. Spain is a member of the EU and, as such, the Spanish Government has
been taking steps to liberalize the country’s electricity sector in accordance with EU directives. Since January 1,
2003, all customers have been eligible to choose their electricity supplier.
AES currently operates and holds a 71% ownership interest in a 1,199 MW natural gas-fired plant located in
Cartagena on the southeast coast of Spain. The plant sells energy into the Pan-Iberian electricity market
(“MIBEL”). The MIBEL market was created in January 2004 when Spain and Portugal signed a formal
agreement. This new market allows generators in the two countries to sell their electricity on both sides of the
Spanish-Portuguese border as one single market. OMEL, Spain’s energy market operator and Portugal’s
equivalent, OMIP, exchanged stakes in April 2006, and were reorganized such that an electricity forwards market
was created in Lisbon and a spot market was created in Madrid.
The main transmission company, Red Eléctrica de España (“REE”), owns 99% of the 400 kV grid and 98%
of the 220 kV network. The law has been changed to ensure that REE will become the sole transmission
company in Spain. REE is also the system operator and is responsible for technical management of the system
and for monitoring transmission. Under the country’s energy infrastructure plan, REE plans to invest in
strengthening the mainland grid, connecting new plants and improving interconnection throughout the country. In
due course, AES Cartagena entered into an agreement with REE for the construction of the interconnection
facilities. The use of such facilities is the subject of another standard regulated contract stating the specific terms
and conditions of access.
Principal Regulations. On December 23, 2010, the Spanish Government implemented the RDL 14/2010
which, among other things, limits the numbers of hours and amount of feed-in-tariff available for photovoltaic
power plants.
• The law that was passed on December 23, 2010 forms part of the government’s policy aimed at
rationalizing and delimiting the legally regulated costs in the electricity network, while searching for
new sources of income and protecting the most vulnerable consumers. It is the latest law of those
passed in the legislative year of 2010.
• Companies will finance the “Bono Social” (income-based subsidy) until 2013 and they will assume the
costs involved in the energy savings and efficiency policies for the period of 2011-2013.
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• All the companies generating electrical power, both those that operate under the ordinary regime as
well as those related to renewable energy and cogeneration, will be paying an access tariff that amounts
to €0.50/MWh.
• The hours that are entitled to premiums in the power plants using photovoltaic technology will be
limited for a period of three years and in addition, a further cap on hours is introduced for the duration
of the FIT scheme as is the case in the other sectors using wind-powered and thermo-solar technology.
• The maximum limits for the tariff deficit in 2010, 2011 and 2012 have been amended to better adapt to
the deviations that arose, and the year 2013 has been kept as the point in time when self-sufficiency
will be reached with regard to tariffs.
This Decree could have a material impact on AES Cartagena and AES Solar’s business in Spain.
In September 2002, the Spanish Cabinet approved a ten-year energy plan which focuses on meeting the
country’s future energy requirements. The plan also reflects reliance on renewable energy sources and
cogeneration. The Spanish electricity system has seen a steady increase in the new generation capacity from
renewable energy sources for many years, particularly as a result of attractive feed-in tariffs (approved by Royal
Decree 661/207). Solar photovoltaic installed capacity in the region is estimated at 3.8 GW. The increase in
renewable energy generation capacity supported by generous feed-in tariffs has led to major changes in the
regulations with the aim of reducing the total cost of the feed-in tariffs for the Spanish electricity system. Partly
as a result of that and also as a result of the tariff deficit already accumulated, Royal Decree-Law 6/2009 has
introduced new measures that affect AES Cartagena. Primarily, the creation of a new obligation on AES
Cartagena (and certain other generation companies) requires them to pay for a portion of the cost of providing a
social subsidy to groups of economically vulnerable electricity consumers. The liability for this cost, under the
AES Cartagena Energy Agreement, is currently the subject of a dispute with the Energy Manager, which has
been referred to arbitration.
In February 2006, Spain introduced a law (Article 2 of Royal Decree Law 3/2006), which became effective
March 2, 2006, that an amount equivalent to the value of the CO2 emission allowances allocated free of charge to
electricity generators will be netted from electricity sales proceeds obtained by Ordinary Regime electricity
generation such as the AES Cartagena plant. The parties obliged to pay these sums are the owners of generation
facilities. For the years 2008, 2009, and 2010 the number of “CO2 credits” required to be surrendered by AES
Cartagena under the ETS has been greater than the number of free credits allocated to it. Liability, under the AES
Cartagena Energy Agreement, for the cost of the shortfall in CO2 emissions credits is currently in dispute, and is
also the subject of the above-mentioned arbitration proceedings. For a further discussion see Item 3.—Legal
Proceedings.
The Spanish Government implemented Orders (Order ITC/3315/2007, introduced on December 15, 2007,
and Orders ITC/1721/2009 and ITC/1722/2009, introduced on June 26, 2009) which developed the principles set
out in Article 2 and set the rules applicable for 2006, 2007 and January 1, 2008 – June 30, 2009, respectively.
The effect of these legislative provisions is that all owners of Ordinary Regime generation facilities in Spain are
required to pay sums equivalent to the value of the CO2 emissions allowances allocated free of charge for 2006,
2007, 2008 and the first six months of 2009. Liability, under the AES Cartagena Energy Agreement, for these
costs is currently in dispute and is the subject of the above-mentioned arbitration proceedings. For a further
discussion see Item 3. —Legal Proceedings. As for the periods after 2012, Directive 2003/87/EC establishes that
power generation facilities will not be issued with allowances free of charge.
On December 23, 2002, Cadastral Law 48/2002 was enacted, which created a new category of property
identified as Special Real Estate. This, together with further legislative changes (i.e., Law 51/2002 and Law
16/2007), led to the Municipality of Cartagena increasing the relevant tax rate and the issuance by the Cadastral
authorities of a new property value assessment on November 21, 2007, which resulted in an increase in the
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amount of Spanish property tax that is payable by AES Cartagena in respect of the plant. Liability under the
Energy Agreement for this increase in tax is currently in dispute and is the subject of the above-mentioned
arbitration proceedings.
Turkey
Structure of Electricity Market. The wholesale generation and distribution market in Turkey is primarily a
bilateral market dominated by state-owned entities. The state-owned Electricity Generation Company (“EUAS”)
and its subsidiaries comprise approximately 24 GW of generation capacity and represent approximately 48% of
the market. Private producers (with public offtake) account for another 35%, and auto producers and merchant
power plants the remaining 17%.
Principal Regulators. The transmission network is owned and controlled by TEIAS, the State Transmission
Company. TETAS, the Wholesale Trading Company, sets wholesale prices based on average procurement costs
from EUAS, auto-producers and Build Operate/Build Own Transfer/Transfer of Operating Rights producers.
This wholesale price represents the buying price for 21 distribution companies. Under TEDAS, there were 20
regional distribution companies. In 2006, four of them were privatized and transferred to the new owners in
2008. Another five of them have been privatized in 2009 and transferred to the new owners in 2010. In 2010, the
remaining ones were privatized and are awaiting approval for handover. In 2010, the Turkish Privatization
Administration finished privatizing all regional distribution companies. There is also an hourly balancing spot
market, with prices typically differing from hour to hour, which is growing and has a capacity of 50 Gigawatt
hours (“GWh”) of daily trade. The automatic price mechanism, which is meant to halt the government
subsidization, has been approved and implementation commenced in July 2008. With this mechanism, all major
cost items (foreign exchange, gas price increases, inflation, among others) are expected to be reflected in the
tariff. As a result, mid-term market wholesale prices are expected to converge to the current spot market prices.
Distribution companies can procure 80-90% of their needs from TETAS and EUAS, but can also source up to
10-20% from other sources. Additionally, eligible customers, using greater than 100 MWh annually, can contract
with the private wholesale companies and private power plants. Retail electricity prices are calculated and
proposed by the distribution companies and then approved by the electricity market regulatory authority, EMRA.
Environmental Regulations. Turkey has introduced a “renewable” feed-in tariff that sets a floor for
renewable generation (geothermal, wind and small-scale hydro) for the first ten years of operation. The floor is
between €0.050 and €0.055 per kWh and decreed by EMRA each year. AES’ Turkey hydro assets fall under the
renewable feed-in tariffs.
The Turkish Government has also announced plans to privatize all the state-owned generation assets, other
than certain large hydro-electric plants, in 2011.
Ukraine
Structure of Electricity Market. The electricity sector in Ukraine is regulated by the National Energy
Regulatory Commission (“NERC”). Electricity costs to end-users in Ukraine consist of three main components:
(1) the wholesale market tariff is the price at which the distributor purchases energy on the wholesale market,
(2) the distribution tariff covers the cost of transporting electricity over the distribution network, and (3) the
supply tariff covers the cost of supplying electricity to an end-user. The total cost permitted by the regulator
under the distribution and supply tariff each year is referred to as the DVA. The distribution and supply tariffs for
all distribution companies in Ukraine are established by the NERC on an annual basis, at which time DVA and
electricity distribution volumes in the tariff are adjusted. A change in the DVA methodology was effected at the
end of 2007 with respect to the treatment of wages and salaries such that the adjustment for inflation was
replaced by an allowance based on the average industrial wage in the country and normative quantity of
personnel.
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Principal Regulations. In 2006, NERC authorized two 25% increases in end-user tariffs for residential
customers. Since 2006, there have been no further changes in residential end-user tariffs. In 2010, the level of
end-user residential tariff covered approximately 30% of real energy costs. A moratorium on end-user tariff
increases was introduced by Presidential decree for non-residential customers, effective from December 1, 2008,
which resulted in the freezing of retail tariffs for the greater part of 2009. In 2010, the retail tariffs have slightly
increased but legally the moratorium is still in force. The wholesale electricity market price increased by 49% in
2008, by 8.5% in 2009, and by 18% in 2010. In the course of 2010, a simultaneous increase in wholesale market
price and pressure on the end-user tariff growth resulted in an increase of the debt to distribution companies by
NERC on compensation of losses for supplying energy to residential customers at privileged tariffs.
A comprehensive review of the distribution tariff methodology addressing issues of revaluation of the rate
base, operational expenses coverage on tariffs, the rate of return and introduction of regulatory incentives to
increase the quality of service was initially expected to take place at the end of 2008. However, since late 2008
and then on an annual basis, NERC has been introducing minimal changes into the tariff methodology to be valid
for just one year, including for 2010, setting the rate of return on initial investment at the level of 15% after tax,
wages and salaries treatment remaining as per the mechanism introduced in 2007, and material operational
expenses subject to indexation by inflation. A similar extension of provisions for 2011 has been effected in late
2010. Development and approval of a comprehensive methodology is expected to take place during 2011 to be
introduced in 2012.
In 2010, the President of Ukraine announced the list of reforms for implementation up through 2014 in all
sectors of the economy, including the electric industry. According to such reforms, there are plans to (i) develop
new tariff methodology in 2011; (ii) increase tariffs for residential customers; (iii) commence elimination of
cross subsidies; (iv) make changes to legislation to improve customers’ payment discipline; (v) privatize state-
owned distribution companies and generation companies; and (vi) introduce a new market structure based on
bilateral agreements and balancing market, etc.
In 2009, the Supreme Court of Ukraine took a preliminary position affecting distribution companies in the
Ukraine, including AES Kievoblenergo and AES Rivneoblenergo, whereunder it required that certain network
commercial losses of power that were previously treated as tax deductible could no longer be treated as such.
This position, if maintained, may have a material effect on AES Kievoblenergo and AES Rivneoblenergo. The
Company expects that the Supreme Court of Ukraine may clarify its position in 2011, and the proceedings in
respect to AES Kievoblenergo and AES Rivneoblenergo are not likely to be finally resolved for another several
years.
United Kingdom
Structure of Electricity Market. On March 21, 2007, the Electricity (Single Wholesale Market) (Northern
Ireland) Order 2007 was enacted, which provided for the introduction and regulation of a single wholesale
electricity market (the “SEM”) for Northern Ireland and the Republic of Ireland that began operation in
November of 2007. Revenue from the SEM includes a regulated capacity and an energy payment based on the
system marginal price. Bidding principles insist bids are cost-reflective and are based on short run marginal cost.
Total annual capacity payments are calculated as the product of the annualized fixed cost of a best new entrant
peaking plant multiplied by the capacity required to meet the security standard. This accumulated capacity is then
distributed on the basis of plant availability throughout the year on a per trading period basis.
Certain generating units (Kilroot GTs 1 and 2 and Ballylumford units 4, CCGT units 10 & 20 and GTs 1 and
2) are contracted under long-term PPAs to NIE Energy Limited terminating on various dates. The CCGT units
are subject to extension by NIEE between March 2012 and 2024. All of the PPAs can be cancelled under
direction from NIAUR from November 1, 2010 with six months’ notice other than the Ballylumford 10 and 20
units which can be cancelled from April 1, 2012. All other units (Kilroot units K1 and K2 whose PPAs
terminated in November 2010, GTs 3 and 4 and Ballylumford units 5 and 6) participate as merchant units in the
SEM as described above.
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The effect of this on the Northern Ireland units operated as merchant plants in the SEM depends largely on
the relative costs of coal and gas. The relevant units receive capacity payments under the SEM.
For the units with PPAs in place, Kilroot and Ballylumford are neutral with respect to the cost of fuel as this
is passed through to its PPA counterparty as an element of the payments made to the respective units based on
their availability.
Principal Regulators. Kilroot and Ballylumford are located in Northern Ireland, which is part of the United
Kingdom, and are subject to regulation by the Northern Ireland Authority for Utility Regulation (“NIAUR”).
Principal Regulations. The principal legislation is The Electricity (Northern Ireland) Order 1992 under
which the Generation Licenses of Kilroot and Ballylumford are granted.
Environmental Regulations. The Kilroot and Ballylumford plants operate under permits granted under the
Pollution Prevention Control Regulations (NI) 2003.
The Industrial Emissions Directive was approved by the European Parliament on July 7, 2010 and is
expected to become law by 2014. The Directive sets stricter limits on the emissions of pollutants such as NOX,
SO2 and particulate and requires further reductions in such emissions by January 2016. The combined package of
the Industrial Emission Directive, National Emissions Ceiling Directive and Best Available Technique
requirements forms a Regulatory Framework for all electricity generation Large Combustion Plants for the
period from 2016 onwards, principally comprising coal-fired, gas-fired, oil-fired and biomass-fired plants. The
following steps may be required in respect of Kilroot: (i) fit selective catalytic reduction and comply with the
new limits by 2023, at which time there may be another review; (ii) opt out and run under a limited life
derogation for a maximum of 17,500 hours; and (iii) opt into a Transitional National Plan which shall apply from
January 1, 2016 until June 30, 2020 then option to comply with Emission Limit Values or Closure.
Currently, the Ballylumford units 4, 5 and 6 (the B Station) are scheduled to close by the end of 2015 under
the Large Combustion Plant Directive; however, there is the possibility that these units may be adapted to be
compliant under the Industrial Emissions Directive. The exact detail will not be known until the Industrial
Emissions Directive is implemented.
With regard to the C Station at Ballylumford, gas turbines using light oils and middle distillates as liquid
fuels shall be subject to an emission limit value for NOX of 90mg/Nm3. GT10 (part of the CCGT plant) is
currently permitted to 120mg/m3 on distillate. This could mean that possible modifications are required to be
able to continue to run distillate as a dual fuel.
It is expected that there will be transitionary arrangements within the Directive to allow plants to manage
the introduction of the new limits and it has been suggested that large combustion plants may have until July
2020 to meet the requirements. The option appears attractive to AES and would allow the units to operate
without substantial capital investment on a restricted load factor until the end of 2020. After 2020, AES would be
required to comply with the new emissions limits in order to continue operations.
The Environmental Liability Directive came into force in Northern Ireland on June 24, 2009 and is aimed at
the prevention and remedying of environmental damage. An operator will be held financially liable if is carries
out certain activities which cause environmental damage, or where there is an imminent threat of such damage,
regardless of whether it intended to cause the damage or was negligent. This includes IPPC permitted
installations. In practice there should be no real change to AES’ operations as a result of the coming into force of
this Directive.
Material Regulatory Actions. On November 25, 2009, the NIAUR published a “Consultation Paper on
Relevant Considerations in Relation to the Possible Cancellation of Generating Unit Agreements in Northern
53
Ireland” which is relevant to various long-term PPAs in Northern Ireland including those at Kilroot and
Ballylumford. On April 30, 2010, NIAUR made notification to Kilroot that it intended to exercise the early
cancellation provisions of the GUAs for the main coal units (K1 and K2) effective November 1, 2010. The
formal cancellation notices were received on October 28, 2010 instructing NIEE to cancel the GUAs for units K1
and K2 effective November 1, 2010. All remaining units remain contracted but are kept under review. Units K1
and K2 fully operate within the SEM (as mentioned above).
Potential or Proposed Regulations. In November 2010, the Council of the EU approved a revised directive
on industrial emissions so as to reduce emissions of pollutants that are harmful to the environment and associated
with cancer, asthma and acid rain. The industrial emissions directive seeks to prevent and control air, water and
soil pollution by industrial installations. It regulates emissions of a wide range of pollutants, including sulphur
and nitrogen compounds, dust particles, asbestos and heavy metals. The directive is aimed at improving local air,
water and soil quality, not at mitigating the global warming effects of some of these substances. The review
integrates seven directives into a single legal Framework and provides for a more harmonized and rigorous
implementation of emissions limits associated with the cleanest available technology, so-called BAT. Deviations
from this standard are only permitted where local and technical characteristics would make it disproportionately
costly. The recast also tightens emission limits for NOX, SO2 and dust from power plants and large combustion
installations in oil refineries and the metal industry. New plants must apply the cleanest available technology
from 2012, four years earlier than initially proposed. Existing plants have to comply with this standard from
2016, though a transition period is foreseen. Until June 30, 2020, member states may define transitional plans
with declining annual caps for NOX, SO2 or dust emissions. Where installations are already scheduled to close by
the end of 2023 or operate less than 17,500 hours after 2016, they may not need to upgrade. Member States have
two years to transpose the Directive.
Middle East & Asia

China
In 2005, the National Development and Reform Commission (“NDRC”) released interim regulations
governing on-grid tariffs, along with two other regulations governing transmission and retail tariffs. The On-Grid
Tariff Measures specify different rules for the determination of on-grid tariffs before and after the
implementation of competitive pricing. Before the implementation of competitive pricing, the on-grid tariffs shall
be appraised and ratified by the pricing authorities by reference to the economic life of power generation projects
and determined in accordance with the principle of allowing IPPs to cover reasonable costs and to obtain
reasonable returns. Such costs were defined to be the average costs in the industry and reasonable returns will be
calculated on the basis of the interest rate of China’s long-term Treasury bond plus certain percentage points.
After the establishment of competitive regional power markets, the on-grid tariffs of electricity generation
companies which participate in the competitive market shall principally consist of two components: the capacity
charge, which is to be determined by the tariff regulatory authority, and the energy charge, which is to be
determined by market competition. However, no implementation rules have been issued to introduce the
competitive pricing. The Retail Tariff Measures aim to reform the various classes of tariff for end-users into three
categories: residential electricity, electricity used in agricultural production and electricity used in industry,
commerce or for other purposes. The tariff for each category is fixed per voltage class. The tariffs shall be
determined with consideration to the fair sharing of the burden, the efficient adjustment of the demand for
electricity and the public policy objectives.
In addition to the foregoing tariff-setting mechanism, China’s central government also issued a tariff
adjustment policy allowing the on-grid tariffs to be pegged to the fuel price in the case of significant fluctuations
in fuel price. Seventy percent of the increase in fuel costs may be passed through in the tariff. The tariffs of coal-
fired facilities in China were increased in 2005, 2006, 2008 and 2009 pursuant to this policy to alleviate the
escalation of fuel price; however, such adjustments were obtained from the regulatory authorities only after a
time lag and fell short of compensating all businesses for coal price increases in recent years. There was no
catch-up tariff adjustment in 2010 pursuant to the foregoing policy.
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Pursuant to the “Renewable Energy Law of China,” which came into effect on January 1, 2006 and was
amended on December 26, 2009, renewable resources such as wind, solar, biomass, geo-thermal and hydro enjoy
complete and unrestricted generation and dispatch, and local grid interconnection is mandated to such plants. To
implement the Renewable Energy Law, on August 2, 2007, various central government agencies jointly issued
the “Temporary Measures for Dispatching Electricity Generated by Energy Conservation Projects”. Under this
regulation, power plants are categorized into various groups and each group will, under certain circumstances,
enjoy priority dispatch over the subsequent groups. The first group is renewable energy power plants, namely
wind, hydro, solar, biomass, tidal-wave, geo-thermal and landfill gas power plants that satisfy certain
environmental standards. The second group is nuclear power plants. The third group is power plants using
“modern coal” which includes cogeneration power plants, and power plants utilizing residual heat, residual gas,
coal-gangue (or waste coal) and coal mine methane. The last three groups are natural gas, conventional coal and
oil-fired power plants. As a result, power plants using renewable resources will enjoy priority dispatch over
power plants using fossil fuels. The amendment to the Renewable Energy Law requires that the local grid
companies abide by the periodic targets developed by the government on the proportion of power to be generated
by renewable energy sources as compared to the total electricity generation and to purchase the entire amount of
electricity generated by renewable resources. This is in line with the requirement that renewable energy power
plants will enjoy unrestricted generation and dispatch under the Renewable Energy Law, as well as the Chinese
government’s policy objective to encourage comprehensive utilization of resources in an energy efficient and
environmentally friendly manner.
In 2007, the Chinese government issued a number of rules and procedures that govern the shutdown of
small coal or oil-fired power plants. The types of plants to be shut down include: (i) power plants with a capacity
under 50 MW; (ii) power plants with a capacity of up to 100 MW which are over 20 years old; (iii) power plants
with a capacity of up to 200 MW whose equipment has reached the end of its useful life; and (iv) power plants
that have coal consumption rates that are higher than either 10% above the applicable provincial average or 15%
above the national average. The shutdown procedures have been set in place to ensure that certain smaller power
plants are appropriately shut down and replaced by larger and more efficient power plants. The purpose of such
rules and regulations is again in accordance with China’s policy to achieve energy conservation and emissions
reductions. China Power International Holdings Ltd., our joint venture partner in Wuhu IV, intended to construct
and develop a 2x600 MW coal-fired power plant. According to this policy and the ratification for the unit of
Wuhu V needs to obtain the corresponding closing and shut-down capacity. After consultation among all
shareholders of Wuhu IV, the shareholders, including AES, agreed to transfer their respective shares to the owner
of Wuhu V and to shut down Wuhu IV. The consideration for the sale of our 25% share in Wuhu IV is Renminbi
50 million ($7.6 million). The deal is expected to be closed by the end of March 2011.
On July 20, 2009, NDRC issued the “Circular on Refining the Policy for On-Grid Pricing of Wind Power”
(NDRC Price 2009 No. 1906), which introduces a benchmark system for on-grid tariffs for wind power replacing
the existing public bidding and concession model for wind projects. The circular provides that on-grid tariffs for
onshore wind power projects approved from August 1, 2009 onwards are fixed using a centrally controlled price
determination mechanism, while on-grid tariffs for offshore wind projects will be determined separately. Under
the circular, China’s onshore area is divided into four different types of wind-power resource regions, and
different prices are set for each of these regions ranging from 0.51 yuan/kWh (US cent 7.5/kWh) for wind power
in regions with the best wind resources, such as Inner Mongolia, to 0.61 yuan/kWh (US cent 8.9/kWh) for
regions with the worst wind resources. According to NDRC, the legislation’s intent is to standardize the wind
power price regulation and promote healthy and sustainable development of the wind-power industry. Currently,
we do not expect that this newly issued circular will have a material adverse impact on our wind power
businesses in China.
India
Structure of Electricity Market. Pursuant to reforms by the Government of India, including enactment of the
Electricity Act of India (“EAI”), the electricity market in India is moving towards a multi-buyer, multi-seller
system as opposed to the past structure which permitted a single buyer to purchase power from power generators.
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This legal and regulatory framework provides flexibility in granting electricity regulatory commissions freedom
in determining tariffs as well as encouraging competition with regulatory intervention. Transmission, distribution
and trade of electricity remain regulated activities which require licenses from an electricity regulatory
commission, unless exempted. The Central Government, through the Ministry of Power, is involved in the power
sector planning, policy formulation and appointment of central regulators. State governments also have powers to
appoint or remove members of the State Regulatory Commissions. The state governments set up and notify the
state load dispatch center. Under the EAI, the state governments are required to unbundle the State Electricity
Boards into separate generation, distribution and transmission companies.
Principal Regulators. India’s power sector is regulated by a two-level regulatory system: at the national
level, the Central Electricity Regulatory Commission (“CERC”); and at the state level, the State Electricity
Regulatory Commissions (“SERC”) (together the “Regulatory Commissions”). CERC regulates tariffs of
generating stations owned by the Central Government, or those involved in generating in more than one State,
and regulating interstate transmission of electricity. SERC regulates intra-state transmission and supply of
electricity within each state. While discharging functions under the EAI, regulatory commissions are guided by
the National Electricity Policy, the Tariff Policy and the National Electricity Plan and directions on any policy
involving public interest issued by the Central Government or state government. Regulatory Commissions are
quasi-judicial authorities entrusted with various functions including determining tariffs, granting licensees and
settling disputes between the generating companies and the licensees, and between licensees. An Appellate
Tribunal has been set up for appeal against orders of Regulatory Commissions. The Appellate Tribunal has quasi-
judicial powers to summon, enforce attendance, require discovery, receive evidence and review decisions. The
orders of the Appellate Tribunal are executable as decrees of a civil court and can be challenged in the Supreme
Court.
Principal Regulations. In 2003, the Government of India enacted the EAI to establish a framework for a
multi-seller/multi-buyer model for the electricity industry, introducing significant changes to India’s electricity
sector. The EAI is a central unified legislation relating to generation, transmission, distribution trading and use of
electricity that replaced multiple legislations. Pursuant to the EAI, the Government of India ratified the National
Electricity Policy in 2005 and the National Tariff Policy in 2006. The policies established deadlines to implement
different provisions of the EAI. However, the pace of actual implementation of the reform process is contingent
on the respective state governments and SERCs, as electricity is a “concurrent” subject in India’s constitution.
There is no license required to set up generation plants under the EAI and generators are allowed to sell to state
utilities, traders and open-access consumers. The access to consumers is subject to regulatory provisions on
transmission corridor availability and payment of cross-subsidy surcharge.
The Central Government ratified the National Electricity Policy in 2005, which includes the following
objectives: access to electricity for all households; availability of power demand to be met by 2012; energy and
peaking shortages to be overcome and adequate spinning reserve to be available; supply of reliable and quality
power of specified standards in an efficient manner and at reasonable rates; per capita availability of electricity to
be increased to over 1,000 units by 2012; financial turnaround and the commercial viability of electricity sector;
and the protection of consumers’ interests. The “Policy for setting up of Mega Power Projects” was ratified by
the Ministry of Power in 1995, and has been revised from time to time. Conditions required to be fulfilled by a
developer for the grant of Mega Power Project status include a thermal power plant with a capacity of 700 MW
or more located in the States of Jammu & Kashmir, the north eastern states of India; a thermal power plant of a
capacity of 1,000 MW or more located in States other than those specified above; a hydro electricity power plant
of a capacity of 350 MW or more located in the States of Jammu & Kashmir, the northeastern states of India; or a
hydro electricity power plant of a capacity of 500 MW or more located in states other than those specified above.
Mega Power Projects would be required to secure long-term PPAs with distribution companies in accordance
with the National Electricity Policy 2005 and the National Tariff Policy 2006, as amended from time to time.
Fiscal concessions available to the Mega Power Projects include the import of capital equipment free of customs
duty and export benefits are available to domestic bidders for projects under both public and private sectors after
meeting certain requirements. Capital goods required for setting up any mega power project qualify for the above
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fiscal benefits after it is certified that: (i) the power purchasing states have granted to the Regulatory
Commissions full powers to fix tariffs; (ii) the power purchasing states undertake, in principle, to privatize
distribution in all cities, in that state, which has a population of more than one million, within a period to be fixed
by the Ministry of Power; and (iii) the income tax holiday regime as per Section 80-IA of the Income Tax Act,
1961 is also available.
The EAI specifies trading in electricity as a licensed activity. The license for electricity trading is required to
be obtained from the relevant regulatory commission. In 2009, CERC issued regulations for the grant of trading
licenses to regulate the interstate trading of electricity. Trading license regulations set out qualifications for the
grant of the license including technical and professional qualifications and net worth requirements. Licensees are
subject to conditions specifying, among other things the extent of trading margin, maintenance of records and a
requirement to pay a license fee, as specified by CERC. The Regulatory Commissions have the right to fix a
ceiling on trading margins in intra-state trading. Two power exchanges have received licenses from CERC and
have started operations. The volume of power trading on the power exchanges is short-term as the bulk of power
is still traded through long-term bilateral contracts.
Environmental Regulations. Compliance with relevant environmental laws is the responsibility of the
occupier or operator of the facilities. Principal regulations include the “Environment (Protection) Act, 1986”
(“EPAct”), an umbrella legislation of environmental protection laws. The EPAct vests the Government of India
with the power to take measures it deems necessary for protecting and improving the quality of the environment
and preventing and controlling environmental pollution. This includes rules for the quality of the environment,
standards for emission of discharge of environmental pollutants from various sources and inspection of any
premises, plant, equipment, machinery, and materials likely to cause pollution. Penalties for violation of the
EPAct include fines or imprisonment. “Environment Impact Assessment Notification S.O. 1533(E), 2006” issued
under the EPAct and the Environment (Protection) Rules, 1986, mandate prior approval by the Ministry of
Environment & Forests or State Environment Impact Assessment Authority for establishing a new project or
expansion or modernization of existing projects. Projects that require preparation of an environment impact
assessment report involve public consultation and hearings. Pursuant thereto, the appropriate authority makes an
appraisal of the project after a final environment impact assessment report is submitted addressing the questions
raised in the public consultation process. “The Water (Prevention and Control of Pollution) Cess Act, 1977” (the
“Water Cess Act”) mandates levy and collection of a tax on water consumed by industries calculated on the basis
of the amount of water consumed for any of the purposes specified under the Water Cess Act. “The Air
(Prevention and Control of Pollution) Act, 1981” (the “Air Act”) requires an industrial plant to obtain consent of
the State Pollution Control Board (“Board”). Similarly, “The Water (Prevention and Control of Pollution) Act,
1974” (the “Water Act”) provides provisions for making an application to the Board for establishing an industry
which may cause effluent discharge into water bodies. The Board may impose conditions relating to pollution
control equipment to be installed at the facilities. Industrial plants in any air pollution control area are not
permitted to discharge emissions/air pollutants in excess of the standards laid by the Board. Under the Air Act
and the Water Act, the Central Pollution Control Board has powers to specify standards for quality of air, while
State Boards have powers to inspect any control equipment, industrial plant or manufacturing process.
Material Regulatory Actions. The Electricity Regulatory Commission (“ERC”) is empowered to determine
tariffs for supply of electricity by a generating company to a distribution licensee, transmission of electricity,
wheeling of electricity and retail sale of electricity. In case of a shortage of supply of electricity, the ERC may fix
the minimum and maximum tariff ceiling for sale or purchase of electricity for a period not exceeding one year to
ensure reasonable prices of electricity. While determining tariffs, the ERC follows principles and methodologies
specified by the CERC for determination of tariffs, including the principle that generation, transmission,
distribution and supply of electricity should be conducted on commercial principles and takes into account
factors which encourage competition, efficiency and economical use of resources.
The EAI provides that the ERC will adopt such tariffs determined through a transparent process of bidding
in accordance with guidelines issued by the Central Government. The Central Government, through the Ministry
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of Power, has issued guidelines for competitive bidding and draft documentation (PPAs) for competitively bid
projects. The determination of tariffs for a power project depends on the mode of participation in the project.
Tariffs may be determined in two ways: (i) based on tariff principles prescribed by CERC, i.e., cost-plus basis
consisting of a capacity charge, an energy charge, an unscheduled interchange charge and incentive payments; or
(ii) a competitive bidding process where the tariff is purely market based.
The ERC is required to adopt a bid-based tariff, although the “Guidelines for Determination of Tariff by
Bidding Process for Procurement of Power by Distribution Licensees, 2005” (“Bidding Guidelines”) permit the
bidding authority to reject all price bids received. The Bidding Guidelines recommend bid evaluation on the basis
of levelized tariff and include two types of bids: Case I bids, where the location, technology and fuel is not
specified by the procurers, i.e., the generating company has the freedom to choose the site and the technology for
the power plant; and Case II bids, where the projects are location-specific and fuel-specific. Tariff rates for
procurement of electricity by distribution licensees can be for long-term procurement of electricity for a period of
seven years and above; or medium-term procurement for a period of up to seven years but exceeding one year.
For long-term procurement under tariff bidding guidelines, a two-stage process is adopted for the bid process and
includes a request for qualification and request for proposal. The procurer may adopt a single-stage tender
process for medium-term procurement, combining the request for qualification and request for proposal
processes. Under this route, IPPs can bid at two parameters, i.e., the fixed or capacity charge or the variable or
energy charge, which comprises the fuel cost for the electricity generated. The bidders are usually permitted to
quote a base price and an acceptable escalation formula. Bidding Guidelines include a two-step process—pre-
qualification and final bid. Bidders are required to submit a technical and financial bid at the RFP stage. Power
purchase and distribution licenses are increasing through the competitive bid route. The Tariff Policy requires all
procurement of power after January 6, 2006 (except for PPAs approved or submitted for approval before
January 6, 2006 or projects which have obtained financing prior to January 6, 2006) by distribution licensees to
be through competitive bidding. Some state regulators have ratified the purchase of power under memorandums
of understanding, on the ground that the tariff policy discussed above is merely indicative and not binding.
Kazakhstan
Structure of Electricity Market. In Kazakhstan, the electricity sector is divided into wholesale and retail
markets. The wholesale electricity market of Kazakhstan is based on bilateral contracts conducted through an
over-the-counter market and KOREM’s centralized trading system. In the retail market, the power distribution
and supply functions are unbundled and retail customers with consumption of one MW or more have a right to
buy the electricity directly from power plants or retail supply companies.
Principal Regulators. The Government of Kazakhstan approves subordinate acts in the power sector
(licensing requirement, technical regulations, market rules, tariff methodologies for natural monopolies, etc.) and
determines the level of price caps for groups of power plants.
The Ministry of Industry and New Technologies (the “Ministry”) is the central executive body responsible
for developing state policy in the power sector and conducting technical regulation. As a part of price cap
regulation, the Ministry is responsible for determining groups of power companies for each price cap, annual
adjustments of price caps and signing agreements on investment obligations with power plants.
The Agency for Regulation of Natural Monopolies (the “Regulator”) acts as a regulator of industries
considered to be “natural monopolies” (transmission and distribution of oil, gas, electricity and heat, railroads,
airports, etc.). In the power industry, the Regulator is responsible for the approval of tariffs for heat generation,
distribution and supply, electricity transmission and distribution as well as end-user tariffs for dominant
companies in the retail power market. The Regulator grants different licenses in the power sector such as licenses
for generation, distribution and retail activities.
The Agency for Protection of Competition (the “AZK”) monitors power market participants to determine
entities with a dominant position and detect violations of antimonopoly legislation.
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The Ministry of Environmental Protection (the “Environmental Ministry”) is responsible for environmental
policy, grants emissions permits and evaluates the environmental impact of new projects.
JSC KEGOC is a state-owned electricity transmission company, which also acts as the system operator with
a central dispatch management function and as the operator of the balancing market.
Principal Regulations. The following major laws and regulations govern the electricity industry:
• Law “On the Power Industry” (the “Kazakhstan Electricity law”);
• Law “On Natural Monopolies and Regulated Markets”;
• Law “On Competition”;
• Law “On Supporting the Use of Renewable Energy Sources”;
• Environmental Code;
• Law “On Licensing”;
• Resolution of the Government of the Republic of Kazakhstan “On Approval of the Price Caps”; and
• The state program of power industry development in 2010-2014.
Continuous changes in the law and regulations result in contradictions between different laws and
regulations. This in turn results in an uncertain regulatory environment in the power sector.
The key elements of price cap regulation of power plants are as follows: (i) the Ministry has determined the
power plant grouping based on the plant type, equipment, fuel and distance from coal mines (thirteen groups of
power plants were defined); (ii) the Ministry has proposed to the government the price cap for each group based
on actual prices in 2008 and the level of investment required and the government has approved price caps for
each groups of power plants for the seven-year period from 2009-2015; (iii) the Ministry may propose to the
government additional annual adjustments to price caps to reflect inflation and investment requirements within
any group or a power plant may apply for an individual investment tariff to the Ministry and the Regulator; (iv) a
power plant determines its investment obligations at its own discretion and signs an agreement with the Ministry
on investment obligations; and (v) the price cap and individual investment tariff regime does not constitute a
price guarantee and power plants should sell to consumers at the competitive market price but not higher than
their group price cap or an individual investment tariff. Only exports of power and sale of ten percent of
generation through a centralized trading system are exempt from this restriction. Power trading activities are
restricted and power plants are allowed to conduct trading activities to provide electricity supply to their
consumers during emergency shutdowns.
The Regulator approves and regulates all tariffs for heat generation, transmission and supply, as well as
electricity transmission and distribution tariffs on a cost-based methodology. Power trading companies, which
the AZK considers dominant entities, must notify the Regulator of any proposed increase in their tariffs and the
Regulator has the right to veto such proposed tariff increases. Furthermore, the Regulator has the right to request
a decrease in the applicable tariffs.
The AZK determines the borders of electricity markets at its own discretion, which does not correspond
with the provisions of the Kazakhstan Electricity Law, and designates entities with dominant market power. The
AZK may consider the tariff of a power plant which is in compliance with price cap regulation to be an excessive
monopolistic price of a dominant entity and impose sanctions, as happens from time to time to AES’ generating
companies.
Environmental regulations. The Environmental Ministry is responsible for environmental policy and
environmental regulations. The Environmental Ministry issues environmental permits, sets emissions limits and
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organizes ecological control in the forms of state environmental impact assessment and independent ecological
audit. The Environmental Ministry reviews applications of power plants and, after conducting the environmental
impact assessment, grants environmental permits for industrial waste, air and water pollutions for a period of not
more than three years.
Material Regulatory Actions. In December 2010, the Ministry refused to sign agreements on investment
obligations with AES UK HPP and AES UK CHP for 2011 and has requested to amend the existing agreement
on investment obligation from AES Shulbinsk HPP in 2011. The Ministry has demanded that AES power plants
in Kazakhstan undertake an additional obligation to spend all profits in new investment projects. The absence of
signed agreements on investment obligations may lead to further sanctions by the AZK and other state authorities
against our businesses.
The AREM has refused to grant a necessary tariff increase to the AES retail company Shygysenergotrade
LLP for 2011. Contrary to applicable law, AREM is requesting that Shygysenergotrade LLP confirm the
existence of agreements on investment obligations between the AES power plants and the Ministry as a condition
for the right to purchase power at new price caps. Increased investment costs and/or sanctions could have a
material impact on these businesses, require additional capital investment, and may impact our results of
operations.
The AZK has designated all AES power plants in Kazakhstan as dominant entities in the Eastern
Kazakhstan and Pavlodar regions. Shygysenergotrade LLP has also been designated by the AZK as a dominant
entity in the Eastern Kazakhstan retail market. AES has challenged these designations but so far has been
unsuccessful in having the designations overturned. The AZK is conducting other investigations into alleged
violations by AES businesses in Kazakhstan of antimonopoly legislation such as excessive monopolistic prices
and ungrounded refusal to supply power to certain customers. AES believes that the investigations per se and
allegations made by the AZK in the course of investigations are without merits, and AES is vigorously
challenging the unfounded actions of the AZK. However, if AES Kazakhstan does not prevail in these
proceedings, there could be a material impact on these businesses and our results of operations.
Potential or Proposed Regulations. The Ministry plans to introduce a capacity market starting in 2015 to
support new investments in generating assets. The capacity market should replace price cap regulation. Details of
the new regulations are not yet publicly available and the regulations are still under review by the government.
The capacity market regulations could be unfavorable to our businesses in Kazakhstan and may have a material
impact on our financial results.
The Ministry and the Regulator have drafted amendments to the Kazakhstan Electricity Law to increase
sanctions for any failure to implement the investment program or comply with the price cap regulation. The
absence of a signed agreement on investment obligations will limit a power plant’s right to apply tariffs up to the
price cap, such that the electricity tariff of a power plant cannot not exceed its 2008 level. It is expected that this
regulation will come into force in 2011. As a result, we may be required to make significant capital investments
and to incur other expenses in order to obtain the benefits of the price caps.
The Regulator plans to introduce benchmarking tariff regulations for power distribution to be effective in
2013. The Environmental Ministry plans to amend the Ecological Code to introduce carbon regulation to comply
with the Kyoto Protocol, which was ratified by Kazakhstan. According to the draft regulation, a power plant will
receive carbon emissions allocations and a carbon trading system will be established. In addition, a violation of
environmental legislation may lead to criminal liability and fines.
Philippines
Structure of Electricity Market. From a vertically integrated industry, the Philippines has unbundled its
power sector into generation, transmission, distribution and supply. The enabling law for this restructuring is
Republic Act No. 9136, otherwise known as the Electric Power Industry Reform Act of 2001 (“EPIRA”). The
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EPIRA primarily aims to increase private sector participation in the power sector and to privatize the
Government’s generation and transmission assets. Generation and supply are open and competitive sectors, while
transmission and distribution are regulated sectors. Sale of power is done primarily thorough medium-term
contracts between generation companies and customers specifying the volume, price and conditions for the sale
of energy and capacity. The Energy Regulatory Commission (“ERC”) approves the said contracts for supply of
energy. Power is also traded in the Wholesale Electricity Spot Market (“WESM”) from which at least 10% of the
distribution companies or electricity cooperatives power requirement must be sourced.
A market optimization model determines the price and dispatch by processing the bids from trading
participants and the system condition from the system operator. The market operator then comes out with a
schedule of both price and energy which maximizes economic gains for participants subject to certain
constraints. The dispatch schedule is then coordinated with the system operator for implementation. The market
is operating under a gross pool, net settlement system, whereby each generator submits energy offers regardless
of their contracted energy. However, the generator should declare their contracted quantities, since the market
will not include contracted energy in its settlement.
New contracts assigned by distribution companies for consumption after expiration are awarded to
generation companies either through the lowest supply price offered in public bid processes or through a
negotiated contract. The ERC then approves the said contract benchmarked against, among others, the prices of
the best new entrant generation company. Except for its supply to MERALCO (the largest distribution company
in the Philippines), to which it is allocated about 14.89% of the contract energy under the NPC Transition Supply
Contract, all supply contracts of AES Masinloc are bilateral contracts already provisionally approved by the
ERC.
Principal Regulators. The ERC, created under the EPIRA, is mandated to protect long-term consumer
interest in terms of quality, reliability and reasonable pricing of sustainable supply of electricity. It is a quasi-
judicial body that promulgates and enforces rules, regulations, guidelines and policies. The Department of
Energy is mandated to prepare, integrate, coordinate, supervise and control all plans, programs, projects and
activities of the government relative to energy exploration, development, utilization, distribution and
conservation. The DOE endorses new or existing generators. The Department of Environment and Natural
Resources administers the system for evaluating the environmental impact of new or existing generating plants.
Principal Regulations. The distinct electricity sector activities are regulated by the EPIRA. Sector activities
are also governed by the corresponding technical regulations and standards, namely, the Philippine Grid Code,
Philippine Distribution Code, Open Access Transmission Service Rules, WESM Rules, and Distribution System
Open Access Rules (“DSOAR”).The keystones of the electricity regulation are: (i) performance based on revenue
cap and non-discriminatory access to transmission lines; (ii) a contract-based supply and spot electricity trading
for generation; (iii) performance based on maximum average price and non-discriminatory access for DUs and
ECs under the performance base rate regime; and (iv) electricity supply by distribution companies in their
respective franchise areas.
Section 31 of EPIRA establishes the Retail Competition and Open Access (“RC&OA”) under which Retail
Electricity Suppliers, who are duly licensed by the ERC, may supply directly to Contestable Customers (end-
users with an average demand of at least 1,000 kW) with DUs and ECs providing non-discriminatory wires
services. Four of the five pre-conditions for RC&OA have already been satisfied and the remaining condition for
open access to commence is expected to be achieved next year. Actual RC&OA may commence six months after
ERC’s determination that all conditions have been satisfied.
Environmental Regulations. The Renewable Energy Act of 2008 was enacted in December 2008 (“R.A.
9513”) R.A. 9513 promotes non-conventional renewable energy sources, such as solar, wind, small hydroelectric
and biomass energies. The law requires that electric power participants to initially source 10% of their supply
from eligible renewable energy resources. The initial requirement of 10% is preliminary, as the National
Renewable Energy Board (“NREB”) has not decided on the final figure. It is also unknown at this time if the
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definition of electric power participant applies to entities that are power producers or if it applies to power
consumers. If and once the regulations are implemented, our businesses in the Philippines could be adversely
impacted by having to source a portion of its generation from renewable energy resources to supply its
customers’ contracts, which could in turn affect our results of operations.
Under Section 6 of the said law, consumers are also given a green energy option which provides end-users
the option to choose renewable energy resources as their source of energy. Water rights are given by the National
Water Resources Board under the Department of Environment and Natural Resource for extraction and discharge
of water used in the operation of the Masinloc Plant.
Material Regulatory Actions. Pending with the ERC is the decision for the approval of additional fees for
AES Masinloc through a rate adjustment and currency exchange adjustment. The ERC previously ruled that NPC
shall be responsible for any recovery/refund for both these recoveries for the transition period prior to the closing
date for each company such as AES Masinloc which obtained facilities in the privatization. With the acquisition
of the Masinloc, our business also acquired the right to supply the electricity requirement of various NPC
customers pursuant to the Transition Supply Contracts entered into between NPC and those customers. In an
Order on November 15, 2010, the ERC approved the refund for currency exchange recovery adjustment,
covering the test period up to June 2009.
Potential or Proposed Regulations. Section 72 of the EPIRA requires a mandated rate reduction from NPC
rates. With the assignment of the Transition Supply Contracts to successor generating companies, such as AES
Masinloc, NPC’s position is that the mandated rate reduction shall be for the account of the successor generating
companies. AES Masinloc filed a petition with ERC to initiate rule making and clarify the MRR implementation
in light of the ongoing privatization of NPC plants. In its decision, the ERC ruled in favor of AES Masinloc,
saying that the EPIRA mandated rate reduction shall be implemented by the successor generating company
subject to the execution of a written instrument between NPC and the new generator specifically containing the
assumption by the latter of such obligation. The ERC ruled in favor of AES Masinloc since there was no such
written instrument. NPC filed a petition for review with the Court asking for a reversal of the said ERC decision.
The case is pending with the Court of Appeals. If AES Masinloc loses this matter on appeal, it may be subject to
the rate reduction described above, which could have a material impact on its business and our results of
operations.
A similar mandated rate reduction case is pending with the ERC. MERALCO alleges that AES Masinloc
failed to account for the rate reduction in MERALCO’s favor amounting to Php179,611,458.98 ($4.1 million). It
is assumed that the ERC will wait for the decision of the first matter described in the preceding paragraph before
ruling on the MERALCO case since the latter is particularly dependent on the outcome of the pending petition
with the Court of Appeals.
Environmental and Land Use Regulations

Overview. The Company faces certain risks and uncertainties related to numerous environmental laws and
regulations, including existing and potential greenhouse gas (“GHG”) legislation or regulations, and actual or
potential laws and regulations pertaining to water discharges, waste management (including disposal of coal
combustion byproducts), and certain air emissions, such as SO2, NOX, particulate matter, mercury and other
hazardous air pollutants. Such risks and uncertainties could result in increased capital expenditures or other
compliance costs which could have a material adverse effect on certain of our United States or international
subsidiaries, and our consolidated results of operations. For further information about these risks, see Item 1A.—
Risk Factors, “Our businesses are subject to stringent environmental laws and regulations,” “Our businesses are
subject to enforcement initiatives from environmental regulatory agencies,” and “Regulators, politicians,
non-governmental organizations and other private parties have expressed concern about greenhouse gas, or
GHG, emissions and the potential risks associated with climate change and are taking actions which could have
a material adverse impact on our consolidated results of operations, financial condition and cash flows” in this
Form 10-K.
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Many of the countries in which the Company does business also have laws and regulations relating to the
siting, construction, permitting, ownership, operation, modification, repair and decommissioning of, and power
sales from electric power generation or distribution assets. In addition, international projects funded by the
International Finance Corporation, the private sector lending arm of the World Bank, or many other international
lenders are subject to World Bank environmental standards or similar standards, which tend to be more stringent
than local country standards. The Company often has used advanced environmental technologies in order to
minimize environmental impacts, including circulating fluidized bed (“CFB”) coal technologies, flue gas
desulphurization technologies, selective catalytic reduction technologies and advanced gas turbines.
Environmental laws and regulations affecting electric power generation and distribution facilities are
complex, change frequently and have become more stringent over time. The Company has incurred and will
continue to incur capital costs and other expenditures to comply with environmental laws and regulations. See
Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital
Expenditures in this Form 10-K for more detail. If these regulations change or the enforcement of these
regulations becomes more rigorous, the Company and its subsidiaries may be required to make significant capital
or other expenditures to comply. There can be no assurance that the businesses operated by the subsidiaries of the
Company would be able to recover any of these compliance costs from their counterparties or customers such
that the Company’s consolidated results of operations, financial condition and cash flows would not be materially
adversely affected.
Various licenses, permits and approvals are required for our operations. Failure to comply with permits or
approvals, or with environmental laws, can result in fines, penalties, capital expenditures, interruptions or
changes to our operations. Certain subsidiaries of the Company are subject to litigation or regulatory action
relating to environmental permits or approvals. See Item 3.—Legal Proceedings in this Form 10-K for more
detail with respect to environmental litigation and regulatory action, including a Notice of Violation (“NOV”)
issued by the United States Environmental Protection Agency against IPL concerning new source review and
prevention of significant deterioration issues under the United States Clean Air Act.
Greenhouse Gas Laws, Protocols and Regulations. In 2010, the Company’s subsidiaries operated electric
power generation businesses which had total approximate direct CO2 emissions of 77.2 million metric tonnes,
approximately 40 million metric tonnes of which were emitted in the United States (both figures ownership
adjusted). The Company uses CO2 emission estimation methodologies supported by the “The Greenhouse Gas
Protocol” reporting standard on GHG emissions. For existing power generation plants, CO2 emissions are either
obtained directly from plant continuous emission monitoring systems or calculated from actual fuel heat inputs
and fuel type CO2 emission factors. The following is an overview of both the regulations and laws that currently
apply to our businesses and those that may be imposed over the next few years. Such regulations and laws could
have a material adverse effect on the electric power generation and distribution businesses of the Company’s
subsidiaries and on the Company’s consolidated results of operations, financial condition and cash flows.
International
In July 2003, the European Community “Directive 2003/87/EC on Greenhouse Gas Emission Allowance
Trading” was created, which requires member states to limit emissions of CO2 from large industrial sources
within their countries. To do so, member states are required to implement EC-approved national allocation plans
(“NAPs”). Under the NAPs, member states are responsible for allocating limited CO2 allowances within their
borders. Directive 2003/87/EC does not dictate how these allocations are to be made, and NAPs that have been
submitted thus far have varied in their allocation methodologies. For these and other reasons, uncertainty remains
with respect to the implementation of the European Union Emissions Trading System (“EU ETS”) that
commenced in January 2005. The European Union has announced that it intends to keep the EU ETS in place
after 2012, even if the Kyoto Protocol is not extended or replaced by another agreement. The Company’s
subsidiaries operate eight electric power generation facilities, and another subsidiary has one under construction,
within six member states which have adopted NAPs to implement Directive 2003/87/EC. At this time, the
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Company cannot determine fully whether achieving and maintaining compliance with the NAPs to which its
subsidiaries are subject will have a material impact on its consolidated operations or results. The risk and benefit
associated with achieving compliance with applicable NAPs at several facilities of the Company’s subsidiaries
are not the responsibility of the Company’s subsidiaries, as they are subject to contractual provisions that transfer
the costs associated with compliance to contract counterparties. However, one such contract counterparty,
GDF-Suez, is currently disputing these provisions with AES Energia Cartagena S.R.L. The matter has been
submitted to arbitration and the parties are currently awaiting a decision. See Item 3.—Legal Proceedings in this
Form 10-K for more detail regarding this dispute. In connection with this dispute or any similar dispute that
might arise with other contract counterparties, there can be no assurance that the Company and/or the relevant
subsidiary would prevail, or that the failure to prevail in any such dispute will not have a material adverse effect
on the Company and its financial condition or consolidated results of operations. Certain of the Company’s
subsidiaries will bear some or all of the risk and benefit associated with compliance with applicable NAPs at
certain facilities. Based upon anticipated operations, CO2 emission allowance allocations, and the costs to acquire
offsets and emission allowances for compliance purposes, the Company has not to-date incurred material costs to
comply with Directive 2003/87/EC and applicable NAPs; however, there can be no guarantees that compliance
will not have a material adverse effect on our business in future periods.
Legislative efforts at the EU have produced a “Climate Change Package.” This package consists of three
directives—Carbon Capture & Storage, an amended EU ETS and a revised Renewables Directive. The amended
EU ETS and Renewable Directives have now been approved by the EU Parliament and they will enter into force
with respect to individual EU member states upon adoption by each such country of implementing legislation or
regulations. The main objectives of the Climate Change Package are usually referred to as the “20-20-20” goals:
• A 20% reduction in EU GHG emissions by 2020, as compared with 1990 levels, or 30% if other
developed nations agree to take similar action by 2020;
• The EU ETS caps on emissions allowances is designed to deliver 21% GHG reduction by 2020
compared to 2005 levels, with distribution of allowances skewed in favor of member states with lower
GDP, and with the potential for auctioning to be phased in for affected facilities;
• 20% increase in energy efficiency; and
• Minimum compulsory 10% target for renewable energy by 2020.
Progress in implementation of the directives referred to above varies from member state to member state,
and many states have not yet adopted any implementing legislation or regulations. AES generation businesses in
each member state will be required to comply with the relevant measures taken to implement the directives.
On February 16, 2005, the Kyoto Protocol became effective. The Kyoto Protocol requires the industrialized
countries that have ratified it to significantly reduce their GHG emissions, including CO2. The vast majority of
developing countries which have ratified the Kyoto Protocol have no GHG reduction requirements, including
many of the countries in which the Company’s subsidiaries operate. Of the 28 countries in which the Company’s
subsidiaries currently operate, all but one—the United States (including Puerto Rico)—have ratified the Kyoto
Protocol. To date, compliance with the Kyoto Protocol and EU ETS has not had a material adverse effect on the
Company’s consolidated results of operations, financial condition and cash flows. In December 2010, the annual
United Nations conference of the parties to the Kyoto Protocol (called COP 16) was held in Cancún, Mexico to
focus on establishing an international agreement or framework to succeed the Kyoto Protocol when it expires at
the end of 2012. COP 16 did not result in any legally binding successor agreement to the Kyoto Protocol, but
countries did agree to continue to work toward a successor international agreement on GHG emissions reductions
by the next annual conference. Countries also agreed to report their annual GHG emissions and many countries
have submitted non-binding emission targets. The United States reaffirmed its non-binding target of reducing
GHG emissions by 17% from 2005 levels by 2020. At present, the Company cannot predict whether compliance
with the Kyoto Protocol or any successor agreements will have a material adverse effect on the Company’s
consolidated results of operations, financial condition and cash flows in future periods.
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Even though it has been announced that the EU ETS will remain in place even if the Kyoto Protocol expires
at the end of 2012 without any successor agreement or commitment on GHG emissions reductions, there remains
significant uncertainty with respect to the implementation of NAPs post-2012. The EU has indicated that a
portion of the emission allowances given to member states will need to be auctioned under the NAPs and the
Company cannot predict with any certainty if compliance with such programs will have a material adverse effect
on its consolidated financial condition or results of operations.
Countries in Latin America, Asia and Africa in which subsidiaries of the Company operate may also choose
to adopt regulations that directly or indirectly regulate GHG emissions from power plants. For a discussion of
regulations in individual countries where our subsidiaries operate, see Item 1. Business—Regulatory Matters in
this Form 10-K. Although the Company does not currently believe that the laws and regulations pertaining to
GHG emissions that have been adopted to date in countries in Latin America, Asia and Africa in which
subsidiaries of the Company operate will have a material impact on the Company, the Company cannot predict
with any certainty if future laws and regulations in these countries regarding CO2 emissions will have a material
adverse effect on the Company’s consolidated financial condition or results of operations.
United States—Federal Legislation and Regulation

Currently, in the United States there is no Federal legislation establishing mandatory GHG emissions
reduction programs (including CO2) affecting the electric power generation facilities of the Company’s
subsidiaries. There are numerous state programs regulating GHG emissions from electric power generation
facilities and there is a possibility that federal GHG legislation will be enacted within the next several years.
Further, the United States Environmental Protection Agency (“EPA”) has adopted regulations pertaining to GHG
emissions and has announced its intention to propose new regulations for electric generating units under
Section 111 of the United States Clean Air Act (“CAA”).
Potential United States Federal GHG Legislation. Federal legislation passed the United States House of
Representatives in 2009 that, if adopted, would impose a nationwide cap-and-trade program to reduce GHG
emissions. In the United States Senate, several different draft bills pertaining to GHG legislation have been
considered at various times since then, including comprehensive GHG legislation similar to the legislation that
passed the United States House of Representatives and more limited legislation focusing only on the utility and
electric generation industry. It is uncertain whether any such legislation or new legislation pertaining to GHG
emissions will be voted on or passed by the Senate. If any legislation is passed by the Senate, it is uncertain
whether such legislation will be reconciled with the House of Representatives’ legislation and ultimately enacted
into law. However, if any such legislation is enacted, the impact could be material to the Company.
EPA GHG Regulation. The EPA promulgated regulations governing GHG emissions from automobiles
under the CAA. The effect of the EPA’s regulation of GHG emissions from mobile sources is that certain
provisions of the CAA will also apply to GHG emissions from existing stationary sources, including many
United States power plants. Beginning on January 2, 2011, construction of new stationary sources and
modifications to existing stationary sources that result in increased GHG emissions became subject to permitting
requirements under the prevention of significant deterioration (“PSD”) program of the CAA. The PSD program,
as currently applicable to GHG emissions, requires sources that emit above a certain threshold of GHGs to obtain
PSD permits prior to commencement of new construction or modifications to existing facilities. In addition,
major sources of GHG emissions may be required to amend, or obtain new, Title V air permits under the CAA to
reflect any new applicable GHG emissions requirements for new construction or for modifications to existing
facilities.
The EPA promulgated a final rule on June 3, 2010, (the “Tailoring Rule”) that sets thresholds for GHG
emissions that would trigger PSD permitting requirements. The Tailoring Rule, which became effective in
January of 2011, provides that sources already subject to PSD permitting requirements need to install Best
Available Control Technology (“BACT”) for greenhouse gases if a proposed modification would result in the
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increase of more than 75,000 tons per year of GHG emissions. Also, under the Tailoring Rule, commencing in
July of 2011, any new sources of GHG emissions that would emit over 100,000 tons per year of GHG emissions,
in addition to any modification that would result in GHG emissions exceeding 75,000 tons per year, would
require PSD review and be subject to related permitting requirements. The EPA anticipates that it will adjust
downward the permitting thresholds of 100,000 tons and 75,000 tons for new sources and modifications,
respectively, in future rulemaking actions. The Tailoring Rule substantially reduces the number of sources
subject to PSD requirements for GHG emissions and the number of sources required to obtain Title V air permits,
although new thermal power plants may still be subject to PSD and Title V requirements because annual GHG
emissions from such plants typically far exceed the 100,000 ton threshold noted above. The 75,000 ton threshold
for increased GHG emissions from modifications to existing sources may reduce the likelihood that future
modifications to plants owned by some of our United States subsidiaries would trigger PSD requirements,
although some projects that would expand capacity or electric output are likely to exceed this threshold, and in
any such cases the capital expenditures necessary to comply with the PSD requirements could be significant.
In December 2010, the EPA entered into a settlement agreement with several states and environmental
groups to resolve a petition for review challenging EPA’s new source performance standards (“NSPS”)
rulemaking for electric utility steam generating units (“EUSGUs”) based on the NSPS’s failure to address GHG
emissions. Under the settlement agreement, the EPA has committed to propose GHG emissions standards for
EUSGUs by July 26, 2011 and to finalize GHG emissions standards for EUSGUs by May 26, 2012. The NSPS
will establish GHG emission standards for newly constructed and reconstructed EUSGUs. The NSPS also will
establish guidelines regarding the best system for achieving further GHG emissions reductions from EUSGUs
and, based on such guidelines, individual states will be required to submit a plan to the EPA to establish GHG
emission standards for existing EUSGUs within their state. It is impossible to estimate the impact and
compliance cost associated with any future NSPS applicable to EUSGUs until such regulations are finalized.
However, the compliance costs could have a material and adverse impact on our consolidated financial condition
or results of operations.
United States—State Legislation and Regulation

Regional Greenhouse Gas Initiative. The primary regulation of GHG emissions affecting the United States
plants of the Company’s subsidiaries has been through the Regional Greenhouse Gas Initiative (“RGGI”). Under
RGGI, ten Northeastern States have coordinated to establish rules that require reductions in CO2 emissions from
power plant operations within those states through a cap-and-trade program. States participating in RGGI in
which our subsidiaries have generating facilities include Connecticut, Maryland, New York and New Jersey.
Under RGGI, power plants must acquire one carbon allowance through auction or in the emission trading
markets for each ton of CO2 emitted. We have estimated the costs to the Company of compliance with RGGI
could be approximately $15 million for 2011. The initial three-year compliance period for RGGI expires at the
end of 2011 and revisions to RGGI for 2012 and thereafter are currently under discussion. While these estimated
compliance costs are not material to the Company, changes in the regulations or price of allowances under RGGI
could have a material and adverse impact on our operations and financial performance.
The Company’s Eastern Energy business is located in New York. Under the New York RGGI rule, each
budgeted source of CO2 emissions is required to surrender one CO2 allowance for each metric tonne of CO2
emitted during a three-year compliance period. All fossil fuel powered generating facilities in New York that
have a generating capacity of 25 or more MW are subject to the rule. Eastern Energy secures its allowance
requirements from the RGGI allowance auction or through the secondary market.
The Company’s Thames business is located in Connecticut. The state of Connecticut passed legislation,
effective July 1, 2007, which requires that the Connecticut Department of Environmental Protection develop
necessary regulations to implement RGGI. The regulations adopted to implement RGGI include an auction of
CO2 emission allowances except for several set-aside accounts. AES Thames is eligible for a set-aside for the
first compliance period, 2009-2011, which allows CO2 allowances to be purchased at $2 per allowance in 2009,
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and $2 per allowance plus a consumer price indexing in years 2010 and 2011. During 2010, a similar $2 per
allowance provision for the second compliance period, 2012-2014, was enacted by the Connecticut legislature for
contracted facilities.
The Company’s Warrior Run business is located in Maryland. In April 2006, the Maryland General
Assembly passed the Maryland Healthy Air Act which, among other things, required the State of Maryland to
join RGGI. The Maryland Department of Environment (“MDE”) adopted regulations that require 100% of the
allowances the State receives to be auctioned except for several small allowance set-aside accounts. The MDE
regulations include a safety valve to control the economic impact of the CO2 cap-and-trade program. If the
auction closing price reaches $7, up to 50% of a year’s allowances will be reserved for purchase by electric
power generation facilities located within Maryland at $7 per allowance, regardless of auction prices. Warrior
Run continues to secure its allowance requirements through the RGGI allowance auction.
The Company’s Red Oak business is located in New Jersey. The State of New Jersey adopted the Global
Warming Response Act in July 2007, which established goals for the reduction of GHG emissions in the State. In
furtherance of these goals, in January 2008, additional state legislation authorized the New Jersey Department of
Environmental Protection (“NJDEP”) to develop and adopt RGGI regulations and the NJDEP RGGI regulations
became effective in 2008. Under the terms of Red Oak’s tolling agreement, RGGI CO2 compliance costs are
passed through to its power offtaker.
In 2010, of the approximately 40 million metric tonnes of CO2 emitted in the United States by the
businesses operated by our subsidiaries (ownership adjusted), approximately 11.3 million metric tonnes were
emitted in states participating in RGGI. Over the past three years, such emissions have averaged approximately
10.9 million metric tonnes. While CO2 emissions from businesses operated by subsidiaries of the Company are
calculated globally in metric tonnes, RGGI allowances are denominated in short tons. (1 metric tonne equals
2,200 pounds and 1 short ton equals 2,000 pounds.) For forecasting purposes, the Company has modeled the
impact of CO2 compliance based on a three-year average of CO2 emissions for its businesses that are subject to
RGGI and that may not be able to pass through compliance costs. The model includes a conversion from metric
tonnes to short tons, as well as the impact of some market recovery by merchant plants and contractual and
regulatory provisions. The model also utilizes a price of $1.86 per allowance under RGGI. The source of this
allowance price estimate was the clearing price in the most recent RGGI allowance auction held in December
2010. Based on these assumptions, the Company estimates that the RGGI compliance costs could be
approximately $15 million for 2011, which is the last year of the first RGGI compliance period. Given the fact
that the assumptions utilized in the model may prove to be incorrect, there is a significant risk that our actual
compliance costs under RGGI will differ from our estimates by a material amount and that our model could
underestimate our costs of compliance.
California. The Company’s Southland and Placerita businesses are located in California. On September 27,
2006, the Governor of California signed the Global Warming Solutions Act of 2006, also called Assembly Bill
32 (“A.B. 32”). A.B. 32 directs the California Air Resources Board (“CARB”) to promulgate regulations that will
require the reduction of CO2 and other GHG emissions to 1990 levels by 2020. On October 29, 2010, CARB
released the design of its GHG cap-and-trade program and on December 16, 2010 voted 9-1 to approve the plan.
The plan begins with Phase I in 2012, and initially covers emissions from electricity generating facilities, large
industrial sources with annual emissions greater than 25,000 tons, and imported electricity. Emitters will be
required to hold enough allowances to match their emissions and can comply by reducing their emissions or by
purchasing tradable allowances from other emitters or at state-run auctions. Companies that reduce their
emissions below the allowances they hold have the opportunity to sell unused allowances. Initially, retail utilities
will be issued free allowances and merchant facilities will be required to bid for allowances at auctions. There is
a floor price of $10 for all allowances purchased at auctions. The number of free allowances will decline in Phase
II and will further decline when Phase III begins in 2018. CARB will continue to refine certain elements of the
cap-and-trade program and further define important provisions, such as allocations in early 2011, through
CARB’s “15 day notice” procedure, whereby changes to adopted regulations are recommended by CARB staff
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and subject to a 15-day public comment period. The Company believes that any compliance costs arising from
A.B. 32 for the thermal power plants of its subsidiaries operating in California will be borne by the power
offtaker under the terms of existing tolling agreements with the offtaker and under the terms of A.B. 32.
However, after the expiration of such tolling agreements, if the Company’s subsidiaries were to sell power on a
merchant basis then such compliance costs could be borne by the subsidiaries.
Western Climate Initiative (WCI). In February 2007, the governors of the Western United States states
(Arizona, New Mexico, California, Washington and Oregon) established the WCI. The WCI has since been
joined by two other states (Montana and Utah) and four Canadian provinces (British Columbia, Manitoba,
Ontario, and Quebec). Participating states and provinces have agreed to cut GHG emissions to 15% below 2005
levels by 2020, and they are considering the implementation of a cap-and-trade program for the electricity
industry to achieve this reduction. On September 23, 2008, the WCI issued its design recommendations for a
cap-and-trade program that would apply to in-state electricity generators and the first jurisdictional deliverer of
electricity into a WCI partner state. The WCI issued draft guidance on the creation of cap-and-trade allowance
budgets on November 29, 2009. The draft guidance contemplates an eventual cap-and-trade program with
flexible mechanisms, such as allowance banking and offsets. The final regulatory design of this program is not
yet known.
Midwestern Greenhouse Gas Reduction Accord (MGGRA). The Company owns the utility IPL, which is
located in Indiana. On November 15, 2007, six Midwestern state governors (including the Governor of Indiana)
and the premier of Manitoba signed the Midwestern Greenhouse Gas Reduction Accord (“MGGRA”),
committing the participating states and province to reduce GHG emissions through the implementation of a
cap-and-trade program. Three states (including Indiana) and the province of Ontario have signed as observers. In
May of 2010, the MGGRA Advisory Group finalized a set of recommendations for the establishment of targets
for emissions reductions in the region and for the design of a regional cap-and-trade program. These include a
recommended reduction in GHG emissions of 20% below 2005 emission levels by 2025. The recommendations
are from the advisory group only, and have not been endorsed or approved by individual governors, including the
Governor of Indiana. If Indiana were to implement the recommended reduction targets, the impact on the
Company’s consolidated results of operations, financial condition, and cash flows could be material.
Hawaii. The Company owns a power generation facility in Hawaii. On June 30, 2007, the Governor of
Hawaii signed Act 234 which sets a goal of reducing GHG emissions to at or below 1990 levels by January 1,
2020. Act 234 also established the Greenhouse Gas Emissions Reduction Task Force, which is tasked with
developing measures to meet Hawaii’s GHG emissions reduction goal. The Task Force filed a report to the
Hawaii Legislature on December 30, 2009, strongly supporting the Hawaii Clean Energy Initiative, which calls
for additional renewable energy development, increased energy efficiency, and incorporates already-enacted
renewable portfolio standards. The Task Force also evaluated other mechanisms and concluded that a state-level
cap-and-trade program is inappropriate due to the small size of Hawaii’s economy.
At this time, other than the estimated impact of CO2 compliance noted above for certain of its businesses
that are subject to RGGI, the Company has not estimated the costs of compliance with other potential United
States federal, state or regional CO2 emissions reduction legislation or initiatives, such as A.B. 32, WCI,
MGGRA and potential Hawaii regulations, due to the fact that most of these proposals are in the early stages of
development and any final regulations or laws, if adopted, could vary drastically from current proposals.
Although complete specific implementation measures for any federal regulations, A.B. 32, WCI, MGGRA and
the Hawaiian regulations have yet to be finalized, if these GHG-related initiatives are finalized they may affect a
number of the Company’s United States subsidiaries unless they are preempted by federal GHG legislation. Any
federal, state or regional legislation or regulations adopted in the United States that would require the reduction
of GHG emissions could have a material adverse effect on the Company’s consolidated results of operations,
financial condition and cash flows.
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The possible impact of any future federal GHG legislation or regulations or any regional or state proposal
will depend on various factors, including but not limited to:
• the geographic scope of legislation and/or regulation (e.g., federal, regional, state), which entities are
subject to the legislation and/or regulation (e.g., electricity generators, load-serving entities, electricity
deliverers, etc.), the enactment date of the legislation and/or regulation and the compliance deadlines
set forth therein;
• the level of reductions of CO2 being sought by the regulation and/or legislation (e.g., 10%, 20%, 50%,
etc.) and the year selected as a baseline for determining the amount or percentage of mandated CO2
reduction (e.g., 10% reduction from 1990 CO2 emission levels, 20% reduction from 2000 CO2 emission
levels, etc.);
• the legislative and/or regulatory structure (e.g., a CO2 cap-and-trade program, a carbon tax, CO2
emission limits, etc.);
• in any cap-and-trade program, the mechanism used to determine the price of emission allowances or
offsets to be auctioned by designated governmental authorities or representatives;
• the price of offsets and emission allowances in the secondary market, including any price floors or
price caps on the costs of offsets and emission allowances;
• the operation of and emissions from regulated units;
• the permissibility of using offsets to meet reduction requirements and the requirements of such offsets
(e.g., type of offset projects allowed, the amount of offsets that can be used for compliance purposes,
any geographic limitations regarding the origin or location of creditable offset projects), as well as the
methods required to determine whether the offsets have resulted in reductions in GHG emissions and
that those reductions are permanent (i.e., the verification method);
• whether the use of proceeds of any auction conducted by responsible governmental authorities is
reinvested in developing new energy technologies, is used to offset any cost impact on certain energy
consumers or is used to address issues unrelated to power;
• how the price of electricity is determined at the affected businesses, including whether the price
includes any costs resulting from any new CO2 legislation and the potential to transfer compliance
costs pursuant to legislation, market or contract, to other parties;
• any impact on fuel demand and volatility that may affect the market clearing price for power;
• the effects of any legislation or regulation on the operation of power generation facilities that may in
turn affect reliability;
• the availability and cost of carbon control technology;
• the extent to which existing contractual arrangements transfer compliance costs to power offtakers or
other contractual counterparties of our subsidiaries;
• whether legislation regulating GHG emissions will preclude EPA from regulating GHG emissions
under the Clean Air Act or preempt private nuisance suits or other litigation by third parties; and
• any opportunities to change the use of fuel at the generation facilities of our subsidiaries or
opportunities to increase efficiency.
Other United States Air Emissions Regulations and Legislation. In the United States the CAA and various
state laws and regulations regulate emissions of air pollutants, including SO2, NOX, particulate matter (“PM”),
mercury and other hazardous air pollutants (“HAPs”). The applicable rules and the steps taken by the Company
to comply with the rules are discussed in further detail below.
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The EPA promulgated the “Clean Air Interstate Rule” (“CAIR”) on March 10, 2005, which required
allowance surrender for SO2 and NOX emissions from existing power plants located in 28 eastern states and the
District of Columbia. CAIR was subsequently challenged in federal court, and on July 11, 2008, the United
States Court of Appeals for the D.C. Circuit issued an opinion striking down much of CAIR and remanding it to
the EPA.
In response to the D.C. Circuit’s opinion, on July 6, 2010, the EPA issued a new proposed rule (the “Clean
Air Transport Rule”) to replace CAIR. The final Clean Air Transport Rule (“Transport Rule”) is scheduled to be
issued by July 2011. The Transport Rule would require significant additional reductions in SO2 and NOX
emissions in 31 states and the District of Columbia starting in 2012, including several states where subsidiaries of
the Company conduct business.
The Transport Rule contemplates three possible options for reducing SO2 and NOX emissions in the
designated states. The EPA’s preferred option contemplates a set limit or budget on SO2 and NOX emissions for
each of the states, with limited interstate trading of emissions allowances and unlimited intrastate trading of SO2
and NOX emissions allowances. Affected power plants would receive emissions allowances based on the
applicable state emissions budgets. The EPA’s second option under the Transport Rule would establish emission
budgets for each state, but only allow intrastate trading of emissions allowances. The final option would set
emission rate limitations for each power plant, but would allow for some intrastate averaging of emission rates.
Under any of the proposed options, additional pollution control technology may be required by some of our
subsidiaries, and the cost of implementing any such technology could affect the financial condition or results of
operations of these subsidiaries or the parent company. The EPA has received public comments on the Transport
Rule, and such public comments will be considered by the EPA prior to promulgating a final rule.
On December 23, 2009, the New York State Department of Environmental Conservation (“NYSDEC”)
published and enacted a rulemaking requiring the application of Reasonably Available Control Technology
(“RACT”) for reductions in NOX emissions from electric utility and industrial boilers, combustion turbines and
internal combustion engines. The regulations establish that sources subject to the new emission limits must
provide a compliance plan by January 1, 2012 and demonstrate compliance by July 1, 2014.
As a result of prior EPA determinations and a D.C. Circuit Court ruling, the EPA is obligated under
Section 112 of the CAA to develop a rule requiring pollution controls for hazardous air pollutants, including
mercury, hydrogen chloride, hydrogen fluoride, and nickel species from coal and oil-fired power plants. The EPA
has entered into a consent decree under which it is obligated to propose the rule by March 2011 and to finalize
the rule by November 2011. In connection with such rule, the CAA requires the EPA to establish maximum
achievable control technology (“MACT”) standards for each pollutant regulated under the rule. MACT is defined
as the emission limitation achieved by the “best performing 12%” of sources in the source category. While it is
impossible to project what emission rate levels the EPA may propose as MACT, the rule may require all coal-
fired power plants to install acid gas scrubbers (wet or dry flue gas desulfurization technology) and/or some other
type of mercury control technology, such as sorbent injection. Most of the Company’s United States coal-fired
plants have acid gas scrubbers or comparable control technologies, but it is possible that EPA regulations will
require improvements to such control technologies at some of our plants. Under the CAA, compliance is required
within three years of the effective date of the rule; however, the compliance period for a unit, or group of units,
may be extended by state permitting authorities (for one additional year) or through a determination by the
President (for up to two additional years). At this time, the Company cannot predict whether new regulations for
hazardous air pollutants will be promulgated or, if promulgated, the extent of such regulations, but the cost of
compliance with any such regulations could be material.
In July 1999, the EPA published the “Regional Haze Rule” to reduce haze and protect visibility in
designated federal areas. On June 15, 2005, the EPA proposed amendments to the Regional Haze Rule that,
among other things, set guidelines for determining when to require the installation of “best available retrofit
technology” (“BART”) at older plants. The amendment to the Regional Haze Rule required states to consider the
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visibility impacts of the haze produced by an individual facility, in addition to other factors, when determining
whether that facility must install potentially costly emissions controls. States were required to submit their
regional haze state implementation plans (“SIPs”) to the EPA by December 2007, but only 13 states met this
deadline. The EPA has yet to approve any state’s Regional Haze state implementation plan. The statute requires
compliance within five years after the EPA approves the relevant SIP, although individual states may impose
more stringent compliance schedules.
Other International Air Emissions Regulations and Legislation. In Europe, the Company is, and will
continue to be, required to reduce air emissions from our facilities to comply with applicable EC Directives,
including Directive 2001/80/EC on the limitation of emissions of certain pollutants into the air from large
combustion plants (the “LCPD”), which sets emission limit values for NOX, SO2, and particulate matter for
large-scale industrial combustion plants for all member states. Until June 2004, existing coal plants could
“opt-in” or “opt-out” of the LCPD emissions standards. Those plants that opted out will be required to cease all
operations by 2015 and may not operate for more than 20,000 hours after 2008. Those that opted-in, like the
Company’s Kilroot facility in the United Kingdom, must invest in abatement technology to achieve specific SO2
reductions. Kilroot installed a new flue gas desulphurization system in the second quarter of 2009 in order to
satisfy SO2 reduction requirements. The Company’s other coal plants in Europe are either exempt from the
Directive due to their size or have opted-in but will not require any additional abatement technology to comply
with the LCPD.
In November 2010, the Council of the EU approved a revised directive on industrial emissions so as to
reduce emissions of pollutants that are alleged to be harmful to the environment and associated with cancer,
asthma and acid rain. The industrial emissions directive seeks to prevent and control air, water and soil pollution
by industrial installations. It regulates emissions of a wide range of pollutants, including sulphur and nitrogen
compounds, dust particles, asbestos and heavy metals. The directive is aimed at improving local air, water and
soil quality. The review integrates seven directives into a single legal framework and provides for a more
harmonized and rigorous implementation of emissions limits associated with the cleanest available technology,
so-called BAT. Deviations from this standard are only permitted where local and technical characteristics would
make it disproportionately costly to comply. The recast also tightens emission limits for NOX, SO2 and dust from
power plants and large combustion installations in oil refineries and the metal industry. New plants must apply
the cleanest available technology from 2012, four years earlier than initially proposed. Existing plants have to
comply with this standard beginning in 2016, though a transition period is foreseen. Until June 30, 2020, member
states may define transitional plans with declining annual caps for NOX, SO2 or dust emissions. Where
installations are already scheduled to close by the end of 2023 or operate less than 17,500 hours after 2016, they
may not need to upgrade. Member states have two years to implement the Directive. Progress in implementation
of the directives referred to above varies from member state to member state. AES generation businesses in each
member state will be required to comply with the relevant measures taken to implement the directives.
On January 18 2011, the President of Chile approved a new air emissions regulation submitted to him by the
national environmental regulatory agency (“CONAMA”). The new regulation establishes limits on emissions of
NOX, SO2, metals and particulate matter for both existing and new thermal power plants, with more stringent
limitations on new facilities. The regulation will become effective upon approval of the General Comptroller of
Chile. The regulation will require AES Gener, our Chilean subsidiary, to install emissions reduction equipment at
its existing thermal plants from late 2011 through 2015. The exact costs of compliance with such regulation have
not yet been determined and the Company believes some of the compliance costs are contractually passed
through to counterparties. However, the compliance costs could be material.
Water Discharges. The Company’s facilities are subject to a variety of rules governing water discharges. In
particular, the Company is subject to the United States Clean Water Act Section 316(b) rule regarding existing
power plant cooling water intake structures issued by the EPA in 2005 (69 Fed. Reg. 41579, July 9, 2004), and
the subsequent Circuit Court of Appeals decision and Supreme Court decision regarding this rule. The rule as
originally issued could affect 12 of the Company’s United States power plants and the rule’s requirements would
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be implemented via each plant’s National Pollutant Discharge Elimination System (“NPDES”) water quality
permit renewal process. These permits are usually processed by state water quality agencies. To protect fish and
other aquatic organisms, the 2004 rule requires existing steam electric generating facilities to utilize the best
technology available for cooling water intake structures. To comply, a steam electric generating facility must first
prepare a Comprehensive Demonstration Study to assess the facility’s effect on the local aquatic environment.
Since each facility’s design, location, existing control equipment and results of impact assessments must be taken
into consideration, costs will likely vary. The timing of capital expenditures to achieve compliance with this rule
will vary from site to site. On January 25, 2007, the United States Court of Appeals for the Second Circuit
decision (Docket Nos. 04-6692 to 04-6699) vacated and remanded major parts of the 2004 rule back to the EPA.
In November 2007, three industry petitioners sought review of the Second Circuit’s decision by the United States
Supreme Court, and this review was granted by the United States Supreme Court in April 2008. In its April 2009
decision, the United States Supreme Court granted the EPA authority to use a cost-benefit analysis when setting
technology-based requirements under Section 316(b) of the Clean Water Act, and expressed no view on the
remaining bases for the Second Circuit’s remand. New draft rule 316(b) regulations are expected to be proposed
by the EPA by March 14, 2011, and finalized by July 27, 2012. Until such regulations are final, the EPA has
instructed state regulatory agencies to use their best professional judgment in determining how to evaluate what
constitutes best technology available for minimizing adverse environmental impacts from cooling water intake
structures. Certain states in which the Company operates power generation facilities, such as New York, have
been delegated authority and are moving forward with best technology available determinations in the absence of
any final rule from the EPA. On September 27, 2010, the California Office of Administrative Law approved a
policy adopted by the California Water Resources Control Board with respect to power plant cooling water
intake structures. This policy became effective on October 1, 2010, and establishes technology-based standards to
implement Section 316(b) of the United States Clean Water Act. At this time, it is contemplated that the
Company’s Redondo Beach, Huntington Beach and Alamitos power plants in California will need to have in
place best technology available by December 31, 2020, or repower the facilities. At present, the Company cannot
predict the final requirements under Section 316(b) or whether compliance with the anticipated new 316(b) rule
will have a material impact on our operations or results, but the Company expects that capital investments and/or
modifications resulting from such requirements could be significant. In the third quarter of 2010, we impaired
approximately $200 million at our business at Southland as a result of this regulation.
Waste Management. In the course of operations, the Company’s facilities generate solid and liquid waste
materials requiring eventual disposal or processing. With the exception of coal combustion byproducts (“CCB”),
the wastes are not usually physically disposed of on our property, but are shipped off site for final disposal,
treatment or recycling. CCB, which consists of bottom ash, fly ash and air pollution control wastes, is disposed of
at some of our coal-fired power generation plant sites using engineered, permitted landfills. Waste materials
generated at our electric power and distribution facilities include CCB, oil, scrap metal, rubbish, small quantities
of industrial hazardous wastes such as spent solvents, tree and land clearing wastes and polychlorinated biphenyl
(“PCB”) contaminated liquids and solids. The Company endeavors to ensure that all of its solid and liquid wastes
are disposed of in accordance with applicable national, regional, state and local regulations. On December 22,
2009, a dike at a coal ash containment area at the Tennessee Valley Authority’s plant in Kingston, Tennessee
failed, and over 1 billion gallons of ash was released into adjacent waterways and properties. Following such
incident, there has been heightened focus on the regulation of CCBs. On June 21, 2010, the EPA published in the
Federal Register a proposed rule to regulate CCB under the Resource Conservation and Recovery Act (“RCRA”).
The proposed rule provides two possible options for CCB regulation, and both options contemplate heightened
structural integrity requirements for surface impoundments of CCB. The first option contemplates regulation of
CCB as a hazardous waste subject to regulation under Subtitle C of the RCRA. Under this option, existing
surface impoundments containing CCB would be required to be retrofitted with composite liners and these
impoundments would likely be phased out over several years. State and/or federal permit programs would be
developed for storage, transport and disposal of CCB. States could bring enforcement actions for non-compliance
with permitting requirements, and the EPA would have oversight responsibilities as well as the authority to bring
lawsuits for non-compliance. The second option contemplates regulation of CCB under Subtitle D of the RCRA.
Under this option, the EPA would create national criteria applicable to CCB landfills and surface impoundments.
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Existing impoundments would also be required to be retrofitted with composite liners and would likely be phased
out over several years. This option would not contain federal or state permitting requirements. The primary
enforcement mechanism under regulation pursuant to Subtitle D would be private lawsuits.
The public comment period for this proposed regulation has expired, and EPA is required to consider the
public comments prior to promulgating a final rule. Requirements under a final rule are expected to become
effective by January 2012, with a compliance schedule of five years. While the exact impact and compliance cost
associated with future regulations of CCB cannot be established until such regulations are finalized, there can be
no assurance that the Company’s businesses, financial condition or results of operations would not be materially
and adversely affected by such regulations.
Subsequent Events
Subsequent to December 31, 2010, the Company continued to repurchase stock under the stock repurchase
program announced on July 7, 2010. The Company has repurchased 1,026,610 shares at a cost of $13 million in
2011, bringing the cumulative total through February 22, 2010 to 9,409,435 shares at a total cost of $112 million
(average price of $11.92 per share including commissions). As of February 25, 2011, $388 million of the $500
million authorized remained available under the stock repurchase program. For additional information, see Note
14—Equity.
On February 1, 2011, AES Thames, LLC (“Thames”), our 208 MW coal-fired plant in Connecticut, filed
petitions for bankruptcy protection under Chapter 11 in the U. S. Bankruptcy Court. The bankruptcy is due, in
part, to the increased cost of energy production. The bankruptcy protection is not expected to have a material
impact on the Company’s financial position or the results of operations.
ITEM 1A. RISK FACTORS

You should consider carefully the following risks, along with the other information contained in or
incorporated by reference in this Form 10-K. Additional risks and uncertainties also may adversely affect our
business and operations including those discussed in Item 7.—Management’s Discussion and Analysis of
Financial Condition and Results of Operations in this Form 10-K. If any of the following events actually occur,
our business, financial results and financial condition could be materially adversely affected.
Risks Associated with our Disclosure Controls and Internal Control over Financial Reporting
We completed the remediation of our material weaknesses in internal control over financial reporting in
2008. However, our disclosure controls and procedures may not be effective in future periods if our judgments
prove incorrect or new material weaknesses are identified.
For each of the fiscal quarters since December 31, 2004 through September 30, 2008, our management
reported material weaknesses in our internal control over financial reporting. A material weakness is a deficiency
(within the meaning of the Public Company Accounting Oversight Board (“PCAOB”) Auditing Standard No. 5),
or a combination of deficiencies, that adversely affects a company’s ability to initiate, authorize, record, process,
or report external financial data reliably in accordance with generally accepted accounting principles such that
there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not
be prevented or detected. As a result of these material weaknesses, our management concluded that for each of
the fiscal quarters from December 31, 2004 through September 30, 2008, we did not maintain effective internal
control over financial reporting and concluded that our disclosure controls and procedures were not effective to
provide reasonable assurance that financial information that we are required to disclose in our reports under the
Exchange Act was recorded, processed, summarized and reported accurately.
To address these material weaknesses in our internal control over financial reporting, each time we prepared
our annual and quarterly reports, we performed additional analyses and other post-closing procedures. These
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additional procedures were costly, time consuming and required us to dedicate a significant amount of our
resources, including the time and attention of our senior management, toward the correction of these problems.
Nevertheless, even with these additional procedures, the material weaknesses in our internal control over
financial reporting caused us to have errors in our financial statements and since 2003 we had to restate our
annual financial statements six times to correct these errors.
The material weaknesses in our internal control over financial reporting also caused us to delay the filing of
certain quarterly and annual reports with the SEC to dates that went beyond the deadlines prescribed by the
SEC’s rules to file such reports. We did not timely file with the SEC our quarterly and annual reports for the year
ended December 31, 2005, our quarterly reports for the second and third quarters of 2005, our annual report for
the year ended December 31, 2006, and our quarterly report for the quarter ended March 31, 2007. Under SEC
rules, failure to timely file these reports prohibited us for a period of twelve months from offering and selling our
securities pursuant to our shelf registration statement on Form S-3, which impaired our ability to access the
capital markets through the public sale of registered securities in a timely manner. The failure to file our annual
and quarterly reports with the SEC in a timely fashion also resulted in covenant defaults under our senior secured
credit facility and the indenture governing certain of our outstanding debt securities. Such defaults required us to
obtain a waiver from the lenders under the senior secured credit facility; however the default under the indentures
was cured upon the filing of the reports within the permitted grace period. In addition to these problems, the
material weaknesses in internal controls, the restatements of our financial statements and the delay in the filing of
our annual and quarterly reports exposed us to other risks including, but not limited to:
• litigation or an expansion of the SEC’s informal inquiry into our restatements or the commencement of
formal proceedings by the SEC or other regulatory authorities, which could require us to incur
significant legal expenses and other costs or to pay damages, fines or other penalties;
• negative publicity;
• ratings downgrades;
• inability to raise capital in the public markets and/or private markets when desired or necessary; or
• the loss or impairment of investor confidence in the Company.
Since December 31, 2008, our management has reported that all of our previously identified material
weaknesses have been remediated and that our internal control over financial reporting and our disclosure
controls have been effective. For a discussion of our internal control over financial reporting and our disclosure
controls, see Item 9A.—Controls and Procedures in this Form 10-K. In making its assessment about the
effectiveness of our internal control over financial reporting and our disclosure controls and procedures,
management had to make certain judgments and it is possible that any number of their judgments could prove to
be incorrect and that our remediation efforts did not fully and completely cure the previously identified material
weaknesses. There is also the possibility that there are other material weaknesses in our internal control that are
unknown to us or that new material weaknesses may develop in the future. The existence of any material
weakness in our internal control over financial reporting would subject us to all of the risks described above.
Furthermore, any evaluation of the effectiveness of controls is subject to risks that those internal controls
may become inadequate in future periods because of changes in business conditions, changes in accounting
practice or policy, or that the degree of compliance with the revised policies or procedures deteriorates over time.
Management, including our CEO and CFO, does not expect that our internal controls will prevent or detect all
errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable,
not absolute, assurance that the objectives of the control system are met. Further, the design of a control system
must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to
their costs.
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In the future, we may be adversely impacted by the efforts required to adopt new accounting standards
issued by the FASB as a result of the convergence of accounting standards project between the FASB and
IASB
The U.S Financial Accounting Standards Board (the “FASB”), which establishes accounting principles
generally accepted in the United States (“GAAP”) guidelines that companies follow in the United States, and the
International Accounting Standards Board (“IASB”), which is an international accounting standards setter
outside of the United States, are presently engaged in a project to converge several accounting standards. The
convergence project may result in the issuance of several new accounting standards in the future that revise
existing GAAP accounting standards and which the Company may be required to adopt under GAAP.
Based on the present timeline released by the FASB, several pronouncements could be issued in final form
in 2011. Although the release of final pronouncements is not assured and the proposed adoption dates of these
standards have not been set, each new standard that the Company must comply with may require significant
effort to adopt. For each new standard, the Company will be required to evaluate the impact of any accounting
changes necessitated by a new standard which will include, but not be limited to, an evaluation of a new
standard’s impact on its financial statements and contractual arrangements; planning for and implementation of
any changes to accounting systems; processes and procedures to ensure the Company properly complies with a
new standard; and training personnel. To the extent that multiple standards are effective as of one date or in close
proximity to one another, the Company may require considerable resources to achieve compliance with these
new standards. An inability to complete these efforts prior to their effective date could have an adverse effect on
our ability to timely file our financial statements with the SEC and/or the effectiveness of our internal controls
over financial reporting.
Risks Related to our High Level of Indebtedness

We have a significant amount of debt, a large percentage of which is secured, which could adversely
affect our business and the ability to fulfill our obligations.
As of December 31, 2010, we had approximately $19.7 billion of outstanding indebtedness on a

consolidated basis. All outstanding borrowings under The AES Corporation’s senior secured credit facility and
certain other indebtedness are secured by certain of our assets, including the pledge of capital stock of many of
The AES Corporation’s directly held subsidiaries. Most of the debt of The AES Corporation’s subsidiaries is
secured by substantially all of the assets of those subsidiaries. Since we have such a high level of debt, a
substantial portion of cash flow from operations must be used to make payments on this debt. Furthermore, since
a significant percentage of our assets are used to secure this debt, this reduces the amount of collateral that is
available for future secured debt or credit support and reduces our flexibility in dealing with these secured assets.
This high level of indebtedness and related security could have other important consequences to us and our
investors, including:
• making it more difficult to satisfy debt service and other obligations at the holding company and/or
individual subsidiaries;
• increasing the likelihood of a downgrade of our debt, which could cause future debt costs and/or
payments to increase under our debt and related hedging instruments and consume an even greater
portion of cash flow;
• increasing our vulnerability to general adverse industry conditions and economic conditions, including
but not limited to adverse changes in foreign exchange rates and commodity prices;
• reducing the availability of cash flow to fund other corporate purposes and grow our business;
• limiting our flexibility in planning for, or reacting to, changes in our business and the industry;
• placing us at a competitive disadvantage to our competitors that are not as highly leveraged; and
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• limiting, along with the financial and other restrictive covenants relating to such indebtedness, among
other things, our ability to borrow additional funds as needed or take advantage of business
opportunities as they arise, pay cash dividends or repurchase common stock.
The agreements governing our indebtedness, including the indebtedness of our subsidiaries, limit, but do not
prohibit the incurrence of additional indebtedness. To the extent we become more leveraged, the risks described
above would increase. Further, our actual cash requirements in the future may be greater than expected.
Accordingly, our cash flows may not be sufficient to repay at maturity all of the outstanding debt as it becomes
due and, in that event, we may not be able to borrow money, sell assets, raise equity or otherwise raise funds on
acceptable terms or at all to refinance our debt as it becomes due. See Note 10—Debt included in Item 8. of this
Form 10-K for a schedule of our debt maturities.
The AES Corporation is a holding company and its ability to make payments on its outstanding
indebtedness, including its public debt securities, is dependent upon the receipt of funds from its subsidiaries
by way of dividends, fees, interest, loans or otherwise.
The AES Corporation is a holding company with no material assets other than the stock of its subsidiaries.
All of The AES Corporation’s revenue is generated through its subsidiaries. Accordingly, almost all of The AES
Corporation’s cash flow is generated by the operating activities of its subsidiaries. Therefore, The AES
Corporation’s ability to make payments on its indebtedness and to fund its other obligations is dependent not
only on the ability of its subsidiaries to generate cash, but also on the ability of the subsidiaries to distribute cash
to it in the form of dividends, fees, interest, loans or otherwise.
However, our subsidiaries face various restrictions in their ability to distribute cash to The AES
Corporation. Most of the subsidiaries are obligated, pursuant to loan agreements, indentures or project financing
arrangements, to satisfy certain restricted payment covenants or other conditions before they may make
distributions to The AES Corporation. In addition, the payment of dividends or the making of loans, advances or
other payments to The AES Corporation may be subject to other contractual, legal or regulatory restrictions.
Business performance and local accounting and tax rules may limit the amount of retained earnings that may be
distributed to us as a dividend. Subsidiaries in foreign countries may also be prevented from distributing funds to
The AES Corporation as a result of foreign governments restricting the repatriation of funds or the conversion of
currencies. Any right that The AES Corporation has to receive any assets of any of its subsidiaries upon any
liquidation, dissolution, winding up, receivership, reorganization, bankruptcy, insolvency or similar proceedings
(and the consequent right of the holders of The AES Corporation’s indebtedness to participate in the distribution
of, or to realize proceeds from, those assets) will be effectively subordinated to the claims of any such
subsidiary’s creditors (including trade creditors and holders of debt issued by such subsidiary).
The AES Corporation could receive less funds than it expects as a result of the current challenges facing the
global and local economies, which could impact the performance of our businesses and their ability to distribute
cash to The AES Corporation. For further discussion of the macroeconomic environment and its impact on our
business, see Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of
Operations—Global Economic Conditions.
The AES Corporation’s subsidiaries are separate and distinct legal entities and, unless they have expressly
guaranteed any of The AES Corporation’s indebtedness, have no obligation, contingent or otherwise, to pay any
amounts due pursuant to such debt or to make any funds available whether by dividends, fees, loans or other
payments. While some of The AES Corporation’s subsidiaries guarantee the Parent’s indebtedness under the
Parent’s senior secured credit facility, none of its subsidiaries guarantee, or are otherwise obligated with respect
to, its outstanding public debt securities.
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Even though The AES Corporation is a holding company, existing and potential future defaults by
subsidiaries or affiliates could adversely affect The AES Corporation.
We attempt to finance our domestic and foreign projects primarily under loan agreements and related
documents which, except as noted below, require the loans to be repaid solely from the project’s revenues and
provide that the repayment of the loans (and interest thereon) is secured solely by the capital stock, physical
assets, contracts and cash flow of that project subsidiary or affiliate. This type of financing is usually referred to
as non-recourse debt or “project financing.” In some project financings, The AES Corporation has explicitly
agreed to undertake certain limited obligations and contingent liabilities, most of which by their terms will only
be effective or will be terminated upon the occurrence of future events. These obligations and liabilities take the
form of guarantees, indemnities, letter of credit reimbursement agreements and agreements to pay, in certain
circumstances, the project lenders or other parties.
As of December 31, 2010, we had approximately $19.7 billion of outstanding indebtedness on a

consolidated basis, of which approximately $4.6 billion was recourse debt of The AES Corporation and
approximately $15.1 billion was non-recourse debt. In addition, we have outstanding guarantees, letters of credit,
and other credit support commitments which are further described in this Form 10-K in Item 7.—Management’s
Discussion and Analysis of Financial Condition and Results of Operations—Capital Resources and Liquidity—
Parent Company Liquidity.
Some of our subsidiaries are currently in default with respect to all or a portion of their outstanding
indebtedness. The total debt classified as current in our consolidated balance sheets related to such defaults was
$1.4 billion at December 31, 2010. While the lenders under our non-recourse project financings generally do not
have direct recourse to The AES Corporation (other than to the extent of any credit support given by The AES
Corporation), defaults thereunder can still have important consequences for The AES Corporation, including,
without limitation:
• reducing The AES Corporation’s receipt of subsidiary dividends, fees, interest payments, loans and
other sources of cash since the project subsidiary will typically be prohibited from distributing cash to
The AES Corporation during the pendency of any default;
• triggering The AES Corporation’s obligation to make payments under any financial guarantee, letter of
credit or other credit support which The AES Corporation has provided to or on behalf of such
subsidiary;
• causing The AES Corporation to record a loss in the event the lender forecloses on the assets;
• triggering defaults in The AES Corporation’s outstanding debt and trust preferred securities. For
example, The AES Corporation’s senior secured credit facility and outstanding senior notes include
events of default for certain bankruptcy related events involving material subsidiaries. In addition, The
AES Corporation’s senior secured credit facility includes certain events of default relating to
accelerations of outstanding debt of material subsidiaries;
• the loss or impairment of investor confidence in the Company; or
• foreclosure on the assets that are pledged under the nonrecourse loans, therefore eliminating any and all
potential future benefits derived from those assets.
None of the projects that are currently in default are owned by subsidiaries that meet the applicable
definition of materiality in The AES Corporation’s senior secured credit facility or other debt agreements in order
for such defaults to trigger an event of default or permit acceleration under such indebtedness. However, as a
result of future mix of distributions, write-down of assets, dispositions and other matters that affect our financial
position and results of operations, it is possible that one or more of these subsidiaries could fall within the
applicable definition of materiality and thereby upon an acceleration of such subsidiary’s debt, trigger an event of
default and possible acceleration of the indebtedness under The AES Corporation’s senior secured credit facility.
The risk of such defaults may have increased as a result of the deteriorating global economy. For further
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discussion of these conditions, see Item 7.—Management’s Discussion and Analysis of Financial Condition and
Results of Operations—Global Economic Conditions of this Form 10-K.
Risks Associated with our Ability to Raise Needed Capital

The AES Corporation has significant cash requirements and limited sources of liquidity.
The AES Corporation requires cash primarily to fund:

• principal repayments of debt;
• interest and preferred dividends;
• acquisitions;
• construction and other project commitments;
• other equity commitments, including business development investments;
• equity repurchases;
• taxes; and
• Parent Company overhead costs.
The AES Corporation’s principal sources of liquidity are:

• dividends and other distributions from its subsidiaries;
• proceeds from debt and equity financings at the Parent Company level; and
• proceeds from asset sales.
For a more detailed discussion of The AES Corporation’s cash requirements and sources of liquidity, please
see Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Capital
Resources and Liquidity of this Form 10-K.
While we believe that these sources will be adequate to meet our obligations at the Parent Company level
for the foreseeable future, this belief is based on a number of material assumptions, including, without limitation,
assumptions about our ability to access the capital or commercial lending markets, the operating and financial
performance of our subsidiaries, exchange rates, our ability to sell assets, and the ability of our subsidiaries to
pay dividends. Any number of assumptions could prove to be incorrect and therefore there can be no assurance
that these sources will be available when needed or that our actual cash requirements will not be greater than
expected. For example, in recent years, certain financial institutions have gone bankrupt. In the event that a bank
who is party to our senior secured credit facility or other facilities goes bankrupt or is otherwise unable to fund its
commitments, we would need to replace that bank in our syndicate or risk a reduction in the size of the facility,
which would reduce our liquidity. In addition, our cash flow may not be sufficient to repay at maturity the entire
principal outstanding under our credit facilities and our debt securities and we may have to refinance such
obligations. There can be no assurance that we will be successful in obtaining such refinancing on terms
acceptable to us or at all and any of these events could have a material effect on us.
Our ability to grow our business could be materially adversely affected if we were unable to raise capital
on favorable terms.
From time to time, we rely on access to capital markets as a source of liquidity for capital requirements not
satisfied by operating cash flows. Our ability to arrange for financing on either a recourse or non-recourse basis
and the costs of such capital are dependent on numerous factors, some of which are beyond our control,
including:
• general economic and capital market conditions;
• the availability of bank credit;
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• investor confidence;
• the financial condition, performance and prospects of The AES Corporation in general and/or that of
any subsidiary requiring the financing as well as companies in our industry or similar financial
circumstances; and
• changes in tax and securities laws which are conducive to raising capital.
Should future access to capital not be available to us, we may have to sell assets or decide not to build new
plants or expand or improve existing facilities, either of which would affect our future growth, results of
operations or financial condition.
A downgrade in the credit ratings of The AES Corporation or its subsidiaries could adversely affect our
ability to access the capital markets which could increase our interest costs or adversely affect our liquidity
and cash flow.
If any of the credit ratings of The AES Corporation or its subsidiaries were to be downgraded, our ability to
raise capital on favorable terms could be impaired and our borrowing costs would increase. Furthermore,
depending on The AES Corporation’s credit ratings and the trading prices of its equity and debt securities,
counterparties may no longer be as willing to accept general unsecured commitments by The AES Corporation to
provide credit support. Accordingly, with respect to both new and existing commitments, The AES Corporation
may be required to provide some other form of assurance, such as a letter of credit and/or collateral, to backstop
or replace any credit support by The AES Corporation. There can be no assurance that such counterparties will
accept such guarantees or that AES could arrange such further assurances in the future. In addition, to the extent
The AES Corporation is required and able to provide letters of credit or other collateral to such counterparties, it
will limit the amount of credit available to The AES Corporation to meet its other liquidity needs.
We may not be able to raise sufficient capital to fund “greenfield” projects in certain less developed
economies which could change or in some cases adversely affect our growth strategy.
Part of our strategy is to grow our business by developing Generation and Utility businesses in less
developed economies where the return on our investment may be greater than projects in more developed
economies. Commercial lending institutions sometimes refuse to provide non-recourse project financing in
certain less developed economies, and in these situations we have sought and will continue to seek direct or
indirect (through credit support or guarantees) project financing from a limited number of multilateral or bilateral
international financial institutions or agencies. As a precondition to making such project financing available, the
lending institutions may also require governmental guarantees of certain project and sovereign related risks.
There can be no assurance, however, that project financing from the international financial agencies or that
governmental guarantees will be available when needed, and if they are not, we may have to abandon the project
or invest more of our own funds which may not be in line with our investment objectives and would leave less
funds for other projects. These risks have increased as a result of the recent credit crisis and the deteriorating
global economy. For further discussion of these global economic conditions and their potential impact on the
Company, see Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of
External Risks Associated with Revenue and Earnings Volatility

Our businesses may incur substantial costs and liabilities and be exposed to price volatility as a result of
risks associated with the wholesale electricity markets, which could have a material adverse effect on our
financial performance.
Some of our businesses sell electricity in the wholesale spot markets in cases where they operate wholly or
partially without long-term power sales agreements. Our Generation and Utility businesses may also buy
electricity in the wholesale spot markets. As a result, we are exposed to the risks of rising and falling prices in
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those markets. The open market wholesale prices for electricity are very volatile and often reflect the fluctuating
cost of coal, natural gas or oil. Consequently, any changes in the supply and cost of coal, natural gas, or oil may
impact the open market wholesale price of electricity.
Volatility in market prices for fuel and electricity may result from among other things:
• plant availability in the markets generally;
• availability and effectiveness of transmission facilities owned and operated by third parties;
• competition;
• demand for energy commodities;
• electricity usage;
• seasonality;
• interest rate and foreign exchange rate fluctuation;
• availability and price of emission credits;
• input prices;
• hydrology and other weather conditions;
• illiquid markets;
• transmission or transportation constraints or inefficiencies;
• availability of competitively priced renewables sources;
• available supplies of natural gas, crude oil and refined products, and coal;
• generating unit performance;
• natural disasters, terrorism, wars, embargoes and other catastrophic events;
• energy, market and environmental regulation, legislation and policies;
• geopolitical concerns affecting global supply of oil and natural gas; and
• general economic conditions in areas where we operate which impact energy consumption.
Our financial position and results of operations may fluctuate significantly due to fluctuations in
currency exchange rates experienced at our foreign operations.
Our exposure to currency exchange rate fluctuations results primarily from the translation exposure
associated with the preparation of the Consolidated Financial Statements, as well as from transaction exposure
associated with transactions in currencies other than an entity’s functional currency. While the Consolidated
Financial Statements are reported in U.S. Dollars, the financial statements of many of our subsidiaries outside the
United States are prepared using the local currency as the functional currency and translated into U.S. Dollars by
applying appropriate exchange rates. As a result, fluctuations in the exchange rate of the U.S. Dollar relative to
the local currencies where our subsidiaries outside the United States report could cause significant fluctuations in
our results. In addition, while our expenses with respect to foreign operations are generally denominated in the
same currency as corresponding sales, we have transaction exposure to the extent receipts and expenditures are
not denominated in the subsidiary’s functional currency.
We also experience foreign transaction exposure to the extent monetary assets and liabilities, including debt,
are in a different currency than the subsidiary’s functional currency. Moreover, the costs of doing business
abroad may increase as a result of adverse exchange rate fluctuations. Our financial position and results of
operations have been affected by fluctuations in the value of a number of currencies, primarily the Euro,
Brazilian real, Argentine peso, Chilean peso, Colombian peso and Philippine peso.
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We may not be adequately hedged against our exposure to changes in commodity prices or interest rates.
We routinely enter into contracts to hedge a portion of our purchase and sale commitments for electricity,
fuel requirements and other commodities to lower our financial exposure related to commodity price fluctuations.
As part of this strategy, we routinely utilize fixed-price forward physical purchase and sales contracts, futures,
financial swaps, and option contracts traded in the over-the-counter markets or on exchanges. We also enter into
contracts which help us hedge our interest rate exposure on variable rate debt. However, we may not cover the
entire exposure of our assets or positions to market price or interest rate volatility, and the coverage will vary
over time. Furthermore, the risk management procedures we have in place may not always be followed or may
not work as planned. In particular, if prices of commodities or interest rates significantly deviate from historical
prices or interest rates or if the price or interest rate volatility or distribution of these changes deviates from
historical norms, our risk management system may not protect us from significant losses. As a result, fluctuating
commodity prices or interest rates may negatively impact our financial results to the extent we have unhedged or
inadequately hedged positions. In addition, certain types of economic hedging activities may not qualify for
hedge accounting under GAAP, resulting in increased volatility in our net income. The Company may also suffer
losses associated with “basis risk” which is the assumed relative correlation of performance between the intended
hedge instrument and the targeted underlying exposure. Furthermore, there is a risk that the current
counterparties to these arrangements may fail or are unable to perform their obligations under these
arrangements.
In 2010, we faced substantial challenges in North America as a result of high coal prices relative to natural
gas, which has affected the results of certain of our coal plants in the region, particularly those which are
merchant plants that are exposed to market risk and those that have hybrid merchant risk, meaning those
businesses that have a PPA in place but purchase fuel at market prices or under short term contracts. In
particular, our coal-fired plants in New York and our petroleum coke-fired plant in Texas have been affected by
these conditions. In North America, current dark spreads and the corresponding forward curves do not currently
present a long-term opportunity to engage in hedging activity for 2011 and we have very limited hedges in place.
As short-term opportunities occur or should dark spreads improve, the Company may engage in additional
hedging in 2011. As a result of these and other challenges that arose from new regulatory concerns, we impaired
$1.1 billion of assets and goodwill in North America as described in Item 7.—Management’s Discussion and
Analysis of Financial Condition and Results of Operations—Impairments. In addition, AES Thames, our 208
MW coal-fired generation business in Connecticut, filed for bankruptcy protection in January 2011.
Supplier and/or customer concentration may expose the Company to significant financial credit or
performance risks.
We often rely on a single contracted supplier or a small number of suppliers for the provision of fuel,
transportation of fuel and other services required for the operation of certain of our facilities. If these suppliers
cannot perform, we would seek to meet our fuel requirements by purchasing fuel at market prices, exposing us to
market price volatility and the risk that fuel and transportation may not be available during certain periods at any
price, which could be lower than contracted prices and would expose these businesses to considerable price
volatility.
At times, we rely on a single customer or a few customers to purchase all or a significant portion of a
facility’s output, in some cases under long-term agreements that account for a substantial percentage of the
anticipated revenue from a given facility. We have also hedged a portion of our exposure to power price
fluctuations through forward fixed price power sales. Counterparties to these agreements may breach or may be
unable to perform their obligations. We may not be able to enter into replacement agreements on terms as
favorable as our existing agreements, or at all. If we were unable to enter into replacement PPAs, these
businesses may have to sell power at market prices.
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The failure of any supplier or customer to fulfill its contractual obligations to The AES Corporation or our
subsidiaries could have a material adverse effect on our financial results. Consequently, the financial
performance of our facilities is dependent on the credit quality of, and continued performance by, suppliers and
customers.
The market pricing of our common stock has been volatile and may continue to be volatile in future
periods.
The market price for our common stock has been volatile in the past, and the price of our common stock
could fluctuate substantially in the future. Stock price movements on a quarter by quarter basis for the past two
years are set forth in Item 5.—Market—Market Information of this Form 10-K. Factors that could affect the price
of our common stock in the future include general conditions in our industry, in the power markets in which we
participate and in the world, including environmental and economic developments, over which we have no
control, as well as developments specific to us, including, risks that could result in revenue and earnings
volatility as well as other risk factors described in this Item 1A.—Risk Factors and those matters described in
Item 7.—Management’s Discussion and Analysis of Financial Conditions and Results of Operations.
Risks Associated with our Operations

We do a significant amount of business outside the United States, including in developing countries,
which presents significant risks.
A significant amount of our revenue is generated outside the United States and a significant portion of our
international operations is conducted in developing countries. Part of our growth strategy is to expand our
business in developing countries because the growth rates and the opportunity to implement operating
improvements and achieve higher operating margins may be greater than those typically achievable in more
developed countries. International operations, particularly the operation, financing and development of projects
in developing countries, entail significant risks and uncertainties, including, without limitation:
• economic, social and political instability in any particular country or region;
• adverse changes in currency exchange rates;
• government restrictions on converting currencies or repatriating funds;
• unexpected changes in foreign laws and regulations or in trade, monetary or fiscal policies;
• high inflation and monetary fluctuations;
• restrictions on imports of coal, oil, gas or other raw materials required by our generation businesses to
operate;
• threatened or consummated expropriation or nationalization of our assets by foreign governments;
• difficulties in hiring, training and retaining qualified personnel, particularly finance and accounting
personnel with GAAP expertise;
• unwillingness of governments, government agencies, similar organizations or other counterparties to
honor their contracts;
• unwillingness of governments, government agencies, courts or similar bodies to enforce contracts that
are economically advantageous to subsidiaries of the Company and economically unfavorable to
counterparties, against such counterparties, whether such counterparties are governments or private
parties;
• inability to obtain access to fair and equitable political, regulatory, administrative and legal systems;
• adverse changes in government tax policy;
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• difficulties in enforcing our contractual rights or enforcing judgments or obtaining a favorable result in
local jurisdictions; and
• potentially adverse tax consequences of operating in multiple jurisdictions.
Any of these factors, by itself or in combination with others, could materially and adversely affect our
business, results of operations and financial condition. For example, partly in response to challenging business
and political conditions in Kazakhstan, in 2008, we sold certain businesses in that country. As another example,
in the second quarter of 2007, we sold our stake in EDC to Petróleos de Venezuela, S.A., the state-owned energy
company in Venezuela after Venezuelan President Hugo Chavez threatened to expropriate the electricity business
in Venezuela. In connection with the sale, we recognized an impairment charge of approximately $680 million.
In addition, our Latin American operations experience volatility in revenues and gross margin which have caused
and are expected to cause significant volatility in our results of operations and cash flows. The volatility is
caused by regulatory and economic difficulties, political instability and currency devaluations being experienced
in many of these countries. This volatility reduces the predictability and enhances the uncertainty associated with
cash flows from these businesses.
The operation of power generation and distribution facilities involves significant risks that could
adversely affect our financial results. We and/or our subsidiaries may not have adequate insurance coverage
for liabilities.
We are in the business of generating and distributing electricity, which involves certain risks that can
adversely affect financial and operating performance, including:
• changes in the availability of our generation facilities or distribution systems due to increases in
scheduled and unscheduled plant outages, equipment failure, failure of transmission systems, labor
disputes, disruptions in fuel supply, inability to comply with regulatory or permit requirements or
catastrophic events such as fires, floods, storms, hurricanes, earthquakes, explosions, terrorist acts or
other similar occurrences; and
• changes in our operating cost structure including, but not limited to, increases in costs relating to: gas,
coal, oil and other fuel; fuel transportation; purchased electricity; operations, maintenance and repair;
environmental compliance, including the cost of purchasing emissions offsets and capital expenditures
to install environmental emission equipment; transmission access; and insurance.
Our businesses require reliable transportation sources (including related infrastructure such as roads, ports
and rail), power sources and water sources to access and conduct operations. The availability and cost of this
infrastructure affects capital and operating costs and levels of production and sales. Limitations, or interruptions
in transportation including as a result of third parties intentionally or unintentionally disrupting the facilities of
our subsidiaries, could impede their ability to produce electricity. This could have a material adverse effect on
our businesses’ results of operations, financial condition and prospects.
In addition, a portion of our generation facilities were constructed many years ago. Older generating
equipment may require significant capital expenditures for maintenance. This equipment is also likely to require
periodic upgrading and improvement. Breakdown or failure of one of our operating facilities may prevent the
facility from performing under applicable power sales agreements which, in certain situations, could result in
termination of a power purchase or other agreement or incurring a liability for liquidated damages and/or other
penalties.
As a result of the above risks and other potential hazards associated with the power generation and
distribution industries, we may from time to time become exposed to significant liabilities for which we may not
have adequate insurance coverage. Power generation involves hazardous activities, including acquiring,
transporting and unloading fuel, operating large pieces of rotating equipment and delivering electricity to
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transmission and distribution systems. In addition to natural risks, such as earthquakes, floods, lightning,
hurricanes and wind, hazards, such as fire, explosion, collapse and machinery failure, are inherent risks in our
operations which may occur as a result of inadequate internal processes, technological flaws, human error or
certain external events. The control and management of these risks depend upon adequate development and
training of personnel and on the existence of operational procedures, preventative maintenance plans and specific
programs supported by quality control systems which reduce, but do not eliminate the possibility of the
occurrence and impact of these risks.
The hazards described above can cause significant personal injury or loss of life, severe damage to and
destruction of property, plant and equipment, contamination of, or damage to, the environment and suspension of
operations. The occurrence of any one of these events may result in our being named as a defendant in lawsuits
asserting claims for substantial damages, environmental cleanup costs, personal injury and fines and/or penalties.
We maintain an amount of insurance protection that we believe is customary, but there can be no assurance that
our insurance will be sufficient or effective under all circumstances and against all hazards or liabilities to which
we may be subject. A claim for which we are not fully insured or insured at all could hurt our financial results
and materially harm our financial condition. Further, due to rising insurance costs and changes in the insurance
markets, we cannot provide assurance that insurance coverage will continue to be available on terms similar to
those presently available to us or at all. Any losses not covered by insurance could have a material adverse effect
on our financial condition, results of operations or cash flows.
Our businesses’ insurance does not cover every potential risk associated with its operations. Adequate
coverage at reasonable rates is not always obtainable. In addition, insurance may not fully cover the liability or
the consequences of any business interruptions such as equipment failure or labor dispute. The occurrence of a
significant adverse event not fully or partially covered by insurance could have a material adverse effect on the
Company’s business, results or operations, financial condition and prospects.
Any of the above risks could have a material adverse effect on our business and results of operations.
Our inability to attract and retain skilled people could have a material adverse effect on our operations.
Our operating success and ability to carry out growth initiatives depends in part on our ability to retain
executives and to attract and retain additional qualified personnel who have experience in our industry and in
operating a company of our size and complexity, including people in our foreign businesses. The inability to
attract and retain qualified personnel could have a material adverse effect on our business, because of the
difficulty of promptly finding qualified replacements. In particular, we routinely are required to assess the
financial and tax impacts of complicated business transactions which occur on a worldwide basis. These
assessments are dependent on hiring personnel on a worldwide basis with sufficient expertise in GAAP to timely
and accurately comply with United States reporting obligations. An inability to maintain adequate internal
accounting and managerial controls and hire and retain qualified personnel could have an adverse affect on our
financial and tax reporting.
We have contractual obligations to certain customers to provide full requirements service, which makes it
difficult to predict and plan for load requirements and may result in increased operating costs to certain of our
businesses.
We have contractual obligations to certain customers to supply power to satisfy all or a portion of their
energy requirements. The uncertainty regarding the amount of power that our power generation and distribution
facilities must be prepared to supply to customers may increase our operating costs. A significant under- or over-
estimation of load requirements could result in our facilities not having enough or having too much power to
cover their obligations, in which case we would be required to buy or sell power from or to third parties at
prevailing market prices. Those prices may not be favorable and thus could increase our operating costs.
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We may not be able to enter into long-term contracts, which reduce volatility in our results of operations.
Even when we successfully enter into long-term contracts, our generation businesses are often dependent on
one or a limited number of customers and a limited number of fuel suppliers.
Many of our generation plants conduct business under long-term contracts. In these instances, we rely on
power sales contracts with one or a limited number of customers for the majority of, and in some cases all of, the
relevant plant’s output and revenues over the term of the power sales contract. The remaining terms of the power
sales contracts range from 1 to 25 years. In many cases, we also limit our exposure to fluctuations in fuel prices
by entering into long-term contracts for fuel with a limited number of suppliers. In these instances, the cash flows
and results of operations are dependent on the continued ability of customers and suppliers to meet their
obligations under the relevant power sales contract or fuel supply contract, respectively. Some of our long-term
power sales agreements are at prices above current spot market prices and some of our long-term fuel supply
contracts are at prices below current market prices. The loss of significant power sales contracts or fuel supply
contracts, or the failure by any of the parties to such contracts that prevents us from fulfilling our obligations
thereunder, could have a material adverse impact on our business, results of operations and financial condition.
In addition, depending on market conditions and regulatory regimes, it may be difficult for us to secure long-term
contracts, either where our current contracts are expiring or for new development projects. The inability to enter
into long-term contracts could require many of our businesses to purchase inputs at market prices and sell
electricity into spot markets, which may not be favorable. For example, during the past several years, various
governmental authorities in Europe have terminated or declined to fulfill their obligations under long-term
contracts with our subsidiaries. In 2008, as part of the accession to the European Union, the Hungarian
government terminated all long-term PPAs, including AES Tisza’s PPA, as of December 31, 2008. Partly as a
result of the termination AES Tisza’s results of operations declined and we were required to record an $85
million asset impairment charge for AES Tisza in the third quarter of 2010. Kilroot in Northern Ireland received
notice from the Utility Regulator directing Kilroot and NIE Energy to terminate the Generating Unit Agreements
for the two coal fired units effective November 1, 2010 and, as a result, the performance (and contributions to
income and cash flow) from Kilroot will decline in 2011 when compared to prior years. Furthermore, these
businesses (and any other businesses whose long-term contracts may be challenged) may have to sell electricity
into the spot markets. Because of the volatile nature of inputs and power prices, the inability to secure long-term
contracts could generate increased volatility in our earnings and cash flows and could generate substantial losses
(or result in a write-down of assets), which could have a material impact on our business and results of
operations.
We have sought to reduce counterparty credit risk under our long-term contracts in part by entering into
power sales contracts with utilities or other customers of strong credit quality and by obtaining guarantees from
certain sovereign governments of the customer’s obligations. However, many of our customers do not have, or
have failed to maintain, an investment-grade credit rating, and our Generation business cannot always obtain
government guarantees and if they do, the government does not always have an investment grade credit rating.
We have also sought to reduce our credit risk by locating our plants in different geographic areas in order to
mitigate the effects of regional economic downturns. However, there can be no assurance that our efforts to
mitigate this risk will be successful. These risks have increased as a result of the deteriorating and volatile global
economy. For further discussion of these global economic conditions and their potential impact on the Company,
see Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of Operations—Global
Economic Conditions in this Form 10-K.
Competition is increasing and could adversely affect us.
The power production markets in which we operate are characterized by numerous strong and capable
competitors, many of whom may have extensive and diversified developmental or operating experience
(including both domestic and international) and financial resources similar to or greater than ours. Further, in
recent years, the power production industry has been characterized by strong and increasing competition with
respect to both obtaining power sales agreements and acquiring existing power generation assets. In certain
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markets, these factors have caused reductions in prices contained in new power sales agreements and, in many
cases, have caused higher acquisition prices for existing assets through competitive bidding practices. The
evolution of competitive electricity markets and the development of highly efficient gas-fired power plants have
also caused, or are anticipated to cause, price pressure in certain power markets where we sell or intend to sell
power. These competitive factors could have a material adverse effect on us.
Some of our subsidiaries participate in defined benefit pension plans and their net pension plan
obligations may require additional significant contributions.
Certain of our subsidiaries have defined benefit pension plans covering substantially all of their respective
employees. Of the twenty nine defined benefit plans, three are at United States subsidiaries and the remaining
plans are at foreign subsidiaries. Pension costs are based upon a number of actuarial assumptions, including an
expected long-term rate of return on pension plan assets, the expected life span of pension plan beneficiaries and
the discount rate used to determine the present value of future pension obligations. Any of these assumptions
could prove to be wrong, resulting in a shortfall of pension plan assets compared to pension obligations under the
pension plan. The Company periodically evaluates the value of the pension plan assets to ensure that they will be
sufficient to fund the respective pension obligations. The Company’s exposure to market volatility is mitigated to
some extent due to the fact that the asset allocations in our largest plans are more heavily weighted to
investments in fixed income securities that have not been as severely impacted by the global recession. Future
downturns in the debt and/or equity markets, or the inaccuracy of any of our significant assumptions underlying
the estimates of our subsidiaries’ pension plan obligations, could result in an increase in pension expense and
future funding requirements, which may be material. Our subsidiaries who participate in these plans are
responsible for satisfying the funding requirements required by law in their respective jurisdiction for any
shortfall of pension plan assets compared to pension obligations under the pension plan. This may necessitate
additional cash contributions to the pension plans that could adversely affect the Parent Company and our
subsidiaries’ liquidity.
For additional information regarding the funding position of the Company’s pension plans, see Item 7.—
Management’s Discussion and Analysis of Financial Condition and Results of Operations—Critical
Accounting—Estimates—Pension and Postretirement Obligations and Note 13 to our Consolidated Financial
Statements included in this Form 10-K.
Our business is subject to substantial development uncertainties.
Certain of our subsidiaries and affiliates are in various stages of developing and constructing “greenfield”
power plants, some but not all of which have signed long-term contracts or made similar arrangements for the
sale of electricity. Successful completion depends upon overcoming substantial risks, including, but not limited
to, risks relating to failures of siting, financing, construction, permitting, governmental approvals, commissioning
delays, or the potential for termination of the power sales contract as a result of a failure to meet certain
milestones. Timing of equipment purchases can also pose financial risks to the Company. As part of our
development process, we attempt to make purchases of equipment and/or materials as needed. However, from
time to time, there may be excess demand for certain types of equipment with substantial delays between the
time we place orders and receive delivery. In those instances, to avoid construction delays and costs associated
with the inability to own and place such equipment and/or materials into service when needed in the construction
process, we may place orders well in advance of deployment. In some cases, we may order such equipment and/
or materials without yet having a specific project where the equipment and/or materials will be deployed, in
anticipation that equipment and materials will be needed at the time of delivery. However, there is a risk that at
the time of delivery, we are required to accept delivery and pay for such equipment and/or materials, even though
no project has materialized where these items will be used. This can result in our having to incur material
equipment and/or material costs, with no deployment plan at delivery. Financing risk has also increased as a
result of the deterioration of the global economy and the crisis in the financial markets and, as a result, we may
forgo certain development opportunities. We believe that capitalized costs for projects under development are
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recoverable; however, there can be no assurance that any individual project will be completed and reach
commercial operation. If these development efforts are not successful, we may abandon a project under
development and write off the costs incurred in connection with such project. At the time of abandonment, we
would expense all capitalized development costs incurred in connection therewith and could incur additional
losses associated with any related contingent liabilities.
Certain delays have occurred at the 670 MW Maritza coal-fired project in Bulgaria, and the project has not
begun commercial operations. As noted in Note 10—Debt included in Item 8 of this Form 10-K, as a result of
these delays the project debt is in default and the Company is working with its lenders to resolve the default. In
addition, as noted in Item 3. —Legal Proceedings, the Company is in litigation with the contractor regarding the
cause of delays. At this time, management believes that Maritza will commence commercial operations for at
least some of the project’s capacity by the second half of 2011. However, commencement of commercial
operations could be delayed beyond this timeframe. There can be no assurance that Maritza will achieve
commercial operations, in whole or in part, by the second half of 2011, resolve the default with the lenders or
prevail in the litigation referenced above, which could result in the loss of some or all of our investment or
require additional funding for the project. Any of these events could have a material adverse effect on the
Company’s operating.
In June 2009, the Supreme Court of Chile affirmed a January 2009 decision of the Valparaiso Court of
Appeals (“VCA”) that the environmental permit for Empresa Electrica Campiche’s (“EEC”) thermal power plant
(“Plant”) was not properly granted and illegal. Construction of the Plant stopped as a consequence of the
Supreme Court’s decision. In December 2009, Chilean authorities approved new land use regulations that
entitled EEC to apply for a new environmental permit. EEC applied for a new environmental permit in January
2010 and permit approval was granted by the Environmental Authority in February 2010. In March 2010, the
Mayor of Puchuncaví and another third party challenged the new environmental permit before the VCA. The
parties later entered into a settlement agreement pursuant to which the challenge to the new environmental permit
was withdrawn in July 2010. In addition, the construction permit that is required to resume construction of the
Plant was issued by the Municipality in August 2010. In September 2010, neighbors of Puchuncaví challenged
the construction permit filing claims in the VCA. In November 2010, the VCA rejected the claims. The
challenging parties subsequently filed appeals with the Supreme Court. In January 2011, the Supreme Court
confirmed the decision of the VCA, finally rejecting the constitutional action. EEC has resumed construction of
the Plant.
Our acquisitions may not perform as expected.
Historically, acquisitions have been a significant part of our growth strategy. We may continue to grow our
business through acquisitions. Although acquired businesses may have significant operating histories, we will
have a limited or no history of owning and operating many of these businesses and possibly limited or no
experience operating in the country or region where these businesses are located. Some of these businesses may
be government owned and some may be operated as part of a larger integrated utility prior to their acquisition. If
we were to acquire any of these types of businesses, there can be no assurance that:
• we will be successful in transitioning them to private ownership;
• such businesses will perform as expected;
• integration or other one-time costs will not be greater than expected;
• we will not incur unforeseen obligations or liabilities;
• such business will generate sufficient cash flow to support the indebtedness incurred to acquire them or
the capital expenditures needed to develop them; or
• the rate of return from such businesses will justify our decision to invest our capital to acquire them.
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In some of our joint venture projects and businesses, we have granted protective rights to minority
holders or we own less than a majority of the equity in the project or business and do not manage or otherwise
control the project or business, which entails certain risks.
We have invested in some joint ventures where we own less than a majority of the voting equity in the
venture. Very often, one of our subsidiaries seeks to exert a degree of influence with respect to the management
and operation of projects or businesses in which we have less than a majority of the ownership interests by
operating the project or business pursuant to a management contract, negotiating to obtain positions on
management committees or to receive certain limited governance rights, such as rights to veto significant actions.
However, we do not always have this type of control over the project or business in every instance; and we may
be dependent on our co-venturers to operate such projects or businesses. Our co-venturers may not have the level
of experience, technical expertise, human resources, management and other attributes necessary to operate these
projects or businesses optimally. The approval of co-venturers also may be required for us to receive
distributions of funds from projects or to transfer our interest in projects or businesses.
In some joint venture agreements where we do have majority control of the voting securities, we have
entered into shareholder agreements granting protective minority rights to the other shareholders. For example,
Companhia Brasiliana de Energia (“Brasiliana”) is a holding company in which we have a controlling equity
interest and through which we own three of our four Brazilian businesses: Eletropaulo, Tietê and Uruguaiana.
We entered into a shareholders’ agreement with an affiliate of the Brazilian National Development Bank
(“BNDES”) which owns more than 49% of the voting equity of Brasiliana. Among other things, the
shareholders’ agreement requires the consent of both parties before taking certain corporate actions, grants both
parties rights of first refusal in connection with the sale of interests in Brasiliana and grants certain drag-along
rights to BNDES. In May 2007, BNDES notified us that it intends to sell all of its interest in Brasiliana pursuant
to a public auction (the “Brasiliana Sale”). BNDES also informed us that if we fail to exercise our right of first
refusal to purchase all of its interest in Brasiliana, then BNDES intends to exercise its drag-along rights under the
shareholders’ agreement and cause us to sell all of our interests in Brasiliana in the Brasiliana Sale as well.
BNDES has since suspended the auction; however, BNDES may determine to recommence a sale process in the
future. In that event, after the auction, if a third party offer has been received in the Brasiliana Sale, we will have
30 days to exercise our right of first refusal to purchase all of BNDES’s interest in Brasiliana on the same terms
as the third-party offer. If we do not exercise this right and BNDES proceeds to exercise its drag-along rights,
then we may be forced to sell all of our interest in Brasiliana. Due to the uncertainty in the sale price at this point
in time, we are uncertain whether we will exercise our right of first refusal should BNDES receive a valid
third-party offer in the Brasiliana Sale and, if we do, whether we would do it alone or with joint venture partners.
Even if we desire to exercise our right of first refusal, we cannot assure that we will have the cash on hand or that
debt or equity financing will be available at acceptable terms in order to purchase BNDES’s interest in
Brasiliana. If we do not exercise our right of first refusal, we cannot be assured that we will not have to record a
loss if the sale price is below the book value of our investment in Brasiliana.
Our renewable energy projects and other initiatives face considerable uncertainties including,
development, operational and regulatory challenges.
AES Wind Generation, AES Solar, our greenhouse gas emissions reductions projects (“GHG Emissions
Reduction Projects”), and our investments in projects such as energy storage are subject to substantial risks.
Projects of this nature have been developed through advancement in technologies which may not be proven or
whose commercial application is limited, and which are unrelated to our core business. Some of these business
lines are dependent upon favorable regulatory incentives to support continued investment, and there is significant
uncertainty about the extent to which such favorable regulatory incentives will be available in the future. For
example, several European countries have recently faced a debt crisis, which has or may result in government
austerity measures. If these incentives are repealed, or sovereign governments are unable or unwilling to fulfill
their commitments or maintain favorable regulatory incentives for renewables, this could materially impact our
renewable businesses, results of operations and financial condition, and impact the ability of the affected
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businesses to continue or grow their operations. In addition, any of the foregoing could also impact contractual
counterparties of our subsidiaries in core power or renewables. If such counterparties are adversely impacted,
then they may be unable to meet their commitments to our subsidiaries, which could also have a material impact
on our results of operations.
Furthermore, production levels for our wind, solar, and GHG Emissions Reduction Projects may be
dependent upon adequate wind, sunlight, or biogas production which can vary significantly from period to
period, resulting in volatility in production levels and profitability. For example, for our wind projects, wind
resource estimates are based on historical experience when available and on wind resource studies conducted by
an independent engineer, and are not expected to reflect actual wind energy production in any given year. With
regard to GHG Emissions Reduction Projects, there is particular uncertainty about whether agreements providing
incentives for reductions in greenhouse gas emissions, such as the Kyoto Protocol, will continue and whether
countries around the world will enact or maintain legislation that provides incentives for reductions in
greenhouse gas emissions, without which such projects may not be economical or financing for such projects
may become unavailable.
As a result, renewable energy projects face considerable risk relative to our core business, including the risk
that favorable regulatory regimes expire or are adversely modified. In addition, because certain of these projects
depend on technology outside of our expertise in Generation and Utility businesses, there are risks associated
with our ability to develop and manage such projects profitably. Furthermore, at the development or acquisition
stage, because of the nascent nature of these industries or the limited experience with the relevant technologies,
our ability to predict actual performance results may be hindered and the projects may not perform as predicted.
There are also risks associated with the fact that many of these projects exist in new or emerging markets, where
long-term fixed price contracts for the major cost and revenue components may be unavailable, which in turn
may result in these projects having relatively high levels of volatility.
These projects can be capital-intensive and generally require that we obtain third party financing, which
may be difficult to obtain. As a result, these capital constraints may reduce our ability to develop these projects.
These risks may be exacerbated by the current global economic crisis, including our management’s increased
focus on liquidity, which may also result in slower growth in the number of projects we can pursue. The
economic downturn could also impact the value of our assets in these countries and our ability to develop these
projects. If the value of these assets decline, this could result in a material impairment or a series of impairments
which are material in the aggregate, which would adversely affect our financial statements.
An impairment in the carrying value of goodwill or long-lived assets would negatively impact our
consolidated results of operations and net worth.
Goodwill is initially recorded at fair value and is not amortized, but is evaluated for impairment at least
annually, or more frequently if impairment indicators are present. In assessing the recoverability of goodwill, we
make estimates and assumptions about sales, operating margin growth rates and discount rates based on our
budgets, business plans, economic projections, anticipated future cash flows and marketplace data. There are
inherent uncertainties related to these factors and management’s judgment in applying these factors. The fair
value of a reporting unit has been determined using an income approach based on the present value of future cash
flows of each reporting unit. We could be required to evaluate the recoverability of goodwill outside of the
required annual assessment process if we experience situations, including but not limited to, disruptions to the
business, unexpected significant declines in operating results, divestiture of a significant component of our
business or adverse actions or assessments by a regulator. There could also be impairments if our acquisitions do
not perform as expected. See further discussion in Risk Factor, “Our Acquisitions May Not Perform as
Expected.” These types of events and the resulting analyses could result in goodwill impairment charges in the
future. Impairment charges could substantially affect our financial results in the periods of such charges. As of
December 31, 2010, we had $1.3 billion of goodwill, which represented approximately 3% of total assets. If
current conditions in the global economy continue or worsen, this could increase the risk that we will have to
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impair goodwill, as further described in Item 7.—Management’s Discussion and Analysis of Financial Condition
and Results of Operations—Global Economic Conditions.
Long-lived assets are initially recorded at fair value and are amortized or depreciated over their useful lives.
Long-lived assets are evaluated for impairment when impairment indicators are present. In assessing the
recoverability of long-lived assets, we make estimates and assumptions about sales, operating margin growth
rates, commodity prices and discount rates based on our budgets, business plans, economic projections,
anticipated future cash flows and marketplace data. There are inherent uncertainties related to these factors and
management’s judgment in applying these factors. Generally, the fair value of a long-lived asset or asset group is
determined using an income approach based on the present value of future cash flows of each asset group. We
could be required to evaluate the recoverability of long-lived assets if we experience situations, including but not
limited to, disruptions to the business, unexpected significant declines in operating results, divestiture of a
significant component of our business or adverse action or assessment by a regulator. These types of events and
the resulting analyses could result in additional long-lived asset impairment charges in the future. Impairment
charges could substantially affect our financial results in the periods of such charges. If current conditions in the
global economy continue or worsen, this could increase the risk that we will have to impair long-lived assets, as
further described in Item 7.—Management’s Discussion and Analysis of Financial Condition and Results of
Certain of our businesses are sensitive to variations in weather.
Our businesses are affected by variations in general weather conditions and unusually severe weather. Our
businesses forecast electric sales on the basis of normal weather, which represents a long-term historical average.
While we also consider possible variations in normal weather patterns and potential impacts on our facilities and
our businesses, there can be no assurance that such planning can prevent these impacts, which can adversely
affect our business. Generally, demand for electricity peaks in winter and summer. Typically, when winters are
warmer than expected and summers are cooler than expected, demand for energy is lower, resulting in less
demand for electricity than forecasted. Significant variations from normal weather where our businesses are
located could have a material impact on our results of operations.
In addition, we are dependent upon hydrological conditions prevailing from time to time in the broad
geographic regions in which our hydroelectric generation facilities are located. If hydrological conditions result
in droughts or other conditions that negatively affect our hydroelectric generation business, our results of
operations could be materially adversely affected. In the past, our businesses in Latin America have been
negatively impacted by lower than normal rainfall. Similarly, our wind businesses are dependent on adequate
wind conditions while the solar projects at AES Solar are dependent on sufficient sunlight. In each case,
inadequate wind or sunlight could have a material adverse impact on these businesses.
Risks associated with Governmental Regulation and Laws

Our operations are subject to significant government regulation and our business and results of
operations could be adversely affected by changes in the law or regulatory schemes.
Our inability to predict, influence or respond appropriately to changes in law or regulatory schemes,
including any inability to obtain expected or contracted increases in electricity tariff rates or tariff adjustments
for increased expenses, could adversely impact our results of operations or our ability to meet publicly
announced projections or analysts’ expectations. Furthermore, changes in laws or regulations or changes in the
application or interpretation of regulatory provisions in jurisdictions where we operate, particularly our Utilities
where electricity tariffs are subject to regulatory review or approval, could adversely affect our business,
including, but not limited to:
• changes in the determination, definition or classification of costs to be included as reimbursable or
pass-through costs to be included in the rates we charge our customers, including but not limited to
costs incurred to upgrade our power plants to comply with more stringent environmental regulations;
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• changes in the determination of what is an appropriate rate of return on invested capital or a
determination that a utility’s operating income or the rates it charges customers is too high, resulting in
a reduction of rates or consumer rebates;
• changes in the definition or determination of controllable or non-controllable costs;
• adverse changes in tax law;
• changes in the definition of events which may or may not qualify as changes in economic equilibrium;
• changes in the timing of tariff increases;
• other changes in the regulatory determinations under the relevant concessions; or
• other changes related to licensing or permitting which affect our ability to conduct business.
Any of the above events may result in lower margins for the affected businesses, which can adversely affect
our business.
In many countries where we conduct business, the regulatory environment is constantly changing or the
regulations can be difficult to interpret. As a result, there is risk that we may not properly interpret certain
regulations and may not understand the impact of certain regulations on our business. For example, in October
2006, ANEEL, which regulates our utility operations at Sul and Eletropaulo in Brazil, issued Normative
Resolution 234 requiring that utilities begin amortizing a liability called “Special Obligations” beginning with
their second tariff reset cycle in 2007 or a later year as an offset to depreciation expense. As of May 23, 2007, the
date of the filing of our 2006 Form 10-K, no industry positions or any other consensus had been reached
regarding how ANEEL guidance should be applied at that date and accordingly, no adjustments to the financial
statements were made relating to Special Obligations in Brazil. Subsequent to May 23, 2007, industry
discussions occurred and other Brazilian companies filed Forms 20-F with the SEC reflecting the impact of
Resolution 234 in their December 31, 2006 financial statements differently from how the Company accounted for
Resolution 234. In the absence of any significant regulatory developments between May 23, 2007 and the date of
these other filings, the Company determined that Resolution 234 required us to record an adjustment to our
Special Obligations liability as of December 31, 2006. In part, the decision to record the adjustment led to the
restatement of our financial statements in the third quarter of 2007. If we face additional challenges interpreting
regulations or changes in regulations, it could have a material adverse impact on our business.
On July 21, 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection
Act (the “Dodd-Frank Act”). While the bulk of regulations contained in the Dodd-Frank Act regulate financial
institutions and their products, there are several provisions related to corporate governance, executive
compensation, disclosure and other matters which relate to public companies generally. The types of provisions
described above are currently not expected to have a material impact on the Company or its results of operations.
Furthermore, while the Dodd-Frank Act substantially expands the regulation regarding the trading, clearing and
reporting of derivative transactions, the Dodd-Frank Act provides for commercial end-user exemptions which
may apply to our derivative transactions, though this is not certain since the Act directs the SEC, CFTC and listed
companies to enact rules that will clarify the Dodd-Frank Act, and such rulemaking could impact the availability
of the commercial end-user exemption. Even if the exemption is available, the Dodd-Frank Act could still have a
material adverse impact on the Company, as the regulation of derivatives (which includes capital and margin
requirements for non-exempt companies), could limit the availability of derivative transactions that we use to
reduce interest rate, commodity and currency risks, which would increase our exposure to these risks. Even if
derivative transactions remain available, the costs to enter into these transactions may increase, which could
adversely affect the operating results of certain projects; cause us to default on certain types of contracts where
we are contractually obligated to hedge certain risks, such as project financing agreements; prevent us from
developing new projects where interest rate hedging is required; cause the Company to abandon certain of its
hedging strategies and transactions, thereby increasing our exposure to interest rate, commodity and currency
risk; and/or consume substantial liquidity by forcing the Company to post cash and/or other permitted collateral
in support of these derivatives. Any of these outcomes could have a material adverse effect on the Company.
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On June 12, 2009 AES Kelanitissa received a letter and an invoice from the Director General, Public
Utilities Commission of Sri Lanka (“PUC”) seeking payment of an Annual Regulatory Fee and pursuant to PUC
assurances on an application for renewal of the AES Kelanitissa generation license. The application is pursuant to
an April 2009 revision of the Sri Lanka Electricity Act (“Electricity Act”), which came into force in April 2009,
notwithstanding that in March 29, 2001, AES Kelanitissa had been granted, and pre-paid fees for, a 21 year
generation license with effect from September 25, 2000 under the Electricity Act, 1950. AES Kelanitissa
submitted an application to be licensed under the revised legislation and, on August 26, 2009, PUC published its
intention to issue a generation license under the revised legislation to AES Kelanitissa and other Independent
Power Producers (“IPPs”) in Sri Lanka. This was consistent with assurances received from relevant authorities
that the revised legislation was to be amended to grandfather IPPs with existing generation licenses. In a letter
dated June 21, 2010 from the PUC, AES Kelanitissa was informed that under the new regulations, as amended in
2009, AES Kelanitissa (Pvt) Ltd no longer fulfilled the eligibility criteria to apply for a generation license. The
“eligibility criteria” to which the letter refers is a provision requiring an element of state ownership.
Representatives of AES Kelanitissa have been informed that an amendment to the Electricity Act to grandfather
existing IPPs remains in the legislative pipeline, although it is not possible to predict with certainty when or
whether such an amendment will be passed. In addition, AES Kelanitissa believes that under Sri Lankan law, it
may continue operations under the 21 year license issued in 2001. No step has been taken to date to prohibit AES
Kelanitissa from generating power and conducting its operations. However, in the event that it is determined that
AES Kelanitissa may not operate under its current license or the revised legislation is not amended (and PUC
maintains that AES Kelanitissa is ineligible for a generation license or extension of the Generating License),
AES Kelanitissa may not be able to continue operations on grounds that it has no license under the revised
legislation. In that event, AES Kelanitissa and/or the Company could face a number of adverse consequences,
including potential litigation with counterparties mitigating a write down in the value of the assets of the
business, continued default status under its debt documents and/or other consequences which could have a
material impact on the Company or its results of operations.
Our Generation business in the United States is subject to the provisions of various laws and regulations
administered in whole or in part by the FERC, including the Public Utility Regulatory Policies Act of 1978
(“PURPA”), the Federal Power Act, and the EPAct 2005. Actions by the FERC and by state utility
commissions can have a material effect on our operations.
EPAct 2005 authorizes the FERC to remove the obligation of electric utilities under Section 210 of PURPA
to enter into new contracts for the purchase or sale of electricity from or to QFs if certain market conditions are
met. Pursuant to this authority, the FERC has instituted a rebuttable presumption that utilities located within the
control areas of the Midwest Transmission System Operator, Inc., PJM (“Pennsylvania, New Jersey and
Maryland”) Interconnection, L.L.C., ISO New England, Inc., the New York Independent System Operator
(“NYISO”) and the Electric Reliability Council of Texas, Inc. are not required to purchase or sell power from or
to QFs above a certain size. In addition, the FERC is authorized under the new law to remove the purchase/sale
obligations of individual utilities on a case-by-case basis. While the new law does not affect existing contracts, as
a result of the changes to PURPA, our QFs may face a more difficult market environment when their current
long-term contracts expire.
EPAct 2005 repealed PUHCA 1935 and enacted PUHCA 2005 in its place. PUHCA 1935 had the effect of
requiring utility holding companies to operate in geographically proximate regions and therefore limited the
range of potential combinations and mergers among utilities. By comparison, PUHCA 2005 has no such
restrictions and simply provides the FERC and state utility commissions with enhanced access to the books and
records of certain utility holding companies. The repeal of PUHCA 1935 removed barriers to mergers and other
potential combinations which could result in the creation of large, geographically dispersed utility holding
companies. These entities may have enhanced financial strength and therefore an increased ability to compete
with us in the United States generation market.
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In accordance with Congressional mandates in the EPAct 1992 and now in EPAct 2005, the FERC has
strongly encouraged competition in wholesale electric markets. Increased competition may have the effect of
lowering our operating margins. Among other steps, the FERC has encouraged RTOs and ISOs to develop
demand response bidding programs as a mechanism for responding to peak electric demand. These programs
may reduce the value of our peaking assets which rely on very high prices during a relatively small number of
hours to recover their costs. Similarly, the FERC is encouraging the construction of new transmission
infrastructure in accordance with provisions of EPAct 2005. Although new transmission lines may increase
market opportunities, they may also increase the competition in our existing markets.
While the FERC continues to promote competition, some state utility commissions have reversed course
and begun to encourage the construction of generation facilities by traditional utilities to be paid for on a
cost-of-service basis by retail ratepayers. Such actions have the effect of reducing sale opportunities in the
competitive wholesale generating markets in which we operate.
Our businesses are subject to stringent environmental laws and regulations.
Our activities are subject to stringent environmental laws and regulations by many federal, regional, state
and local authorities, international treaties and foreign governmental authorities. These laws and regulations
generally concern emissions into the air, effluents into the water, use of water, wetlands preservation,
remediation of contamination, waste disposal, endangered species and noise regulation, among others. Failure to
comply with such laws and regulations or to obtain any necessary environmental permits pursuant to such laws
and regulations could result in fines or other sanctions. Environmental laws and regulations affecting power
generation and distribution are complex and have tended to become more stringent over time. Congress and other
domestic and foreign governmental authorities have either considered or implemented various laws and
regulations to restrict or tax certain emissions, particularly those involving air and water emissions. See the
various descriptions of these laws and regulations contained in Item 1.—Business—Regulatory Matters of this
Form 10-K. These laws and regulations have imposed, and proposed laws and regulations could impose in the
future, additional costs on the operation of our power plants. We have incurred and will continue to incur
significant capital and other expenditures to comply with these and other environmental laws and regulations.
Changes in, or new, environmental restrictions may force us to incur significant expenses or expenses that may
exceed our estimates. There can be no assurance that we would be able to recover all or any increased
environmental costs from our customers or that our business, financial condition, including recorded asset values
or results of operations would not be materially and adversely affected by such expenditures or any changes in
domestic or foreign environmental laws and regulations.
Our businesses are subject to enforcement initiatives from environmental regulatory agencies.
The EPA has pursued an enforcement initiative against coal-fired generating plants alleging wide-spread
violations of the new source review and prevention of significant deterioration provisions of the CAA. The EPA
has brought suit against a number of companies and has obtained settlements with approximately 17 companies
over such allegations. The allegations typically involve claims that a company made major modifications to a
coal-fired generating unit without proper permit approval and without installing best available control
technology. The principal focus of this EPA enforcement initiative is emissions of SO2 and NOX. In connection
with this enforcement initiative, the EPA has imposed fines and required companies to install improved pollution
control technologies to reduce emissions of SO2 and NOX. One of our businesses, IPL, is currently the subject of
such an EPA enforcement action, and another business, Eastern Energy, has received an information request
from the EPA in connection with a possible enforcement action. See Item 3.—Legal Proceedings of this
Form 10-K for more detail with respect to these EPA enforcement actions and information requests. There can be
no assurance that foreign environmental regulatory agencies in countries in which our subsidiaries operate will
not pursue similar enforcement initiatives under relevant laws and regulations.
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Regulators, politicians, non-governmental organizations and other private parties have expressed
concern about greenhouse gas, or GHG, emissions and the potential risks associated with climate change and
are taking actions which could have a material adverse impact on our consolidated results of operations,
financial condition and cash flows.
As discussed in Item 1.—Business—Regulatory Matters—Environmental and Land Use Regulations, at the

international, federal and various regional and state levels, rules are in effect or policies are under development to
regulate GHG emissions, thereby effectively putting a cost on such emissions in order to create financial
incentives to reduce them. In 2010, the Company’s subsidiaries operated businesses which had total approximate
CO2 emissions of 77.2 million metric tonnes approximately 40 million of which were emitted by businesses
located in the United States (both figures ownership adjusted). The Company uses CO2 emission estimation
methodologies supported by “The Greenhouse Gas Protocol” reporting standard on GHG emissions. For existing
power generation plants, CO2 emissions are either obtained directly from plant continuous emission monitoring
systems or calculated from actual fuel heat inputs and fuel type CO2 emission factors. The estimated annual CO2
emissions from fossil fuel electric power generation facilities of the Company’s subsidiaries that are in
construction or development and have received the necessary air permits for commercial operations are
approximately 18 million metric tonnes (ownership adjusted). This overall estimate is based upon a number of
projections and assumptions which may prove to be incorrect such as the forecast dispatch, anticipated plant
efficiency, fuel type, CO2 emissions and our subsidiaries’ achieving completion of such construction and
development projects. However, it is certain that the projects under construction or development when completed
will increase emissions of our portfolio and therefore could increase the risks associated with emissions
described below. Because there is significant uncertainty regarding these estimates, actual emissions from these
projects under construction or development may vary substantially from these estimates.
The subsidiaries of the Company often seek to pass on any costs arising from CO2 emissions to contract
counterparties, but there can be no assurance that the subsidiaries of the Company will effectively pass such costs
onto the contract counterparties or that the cost and burden associated with any dispute over which party bears
such costs would not be burdensome and costly to the relevant subsidiaries of the Company.
Foreign, federal, state or regional regulation of GHG emissions could have a material adverse impact on the
Company’s financial performance. The actual impact on the Company’s financial performance and the financial
performance of the Company’s subsidiaries will depend on a number of factors, including among others, the
degree and timing of GHG emissions reductions required under any such legislation or regulations, the cost of
emissions reduction equipment the price and availability of offsets, the extent to which market based compliance
options are available, the extent to which our subsidiaries would be entitled to receive GHG emissions
allowances without having to purchase them in an auction or on the open market and the impact of such
legislation or regulation on the ability of our subsidiaries to recover costs incurred through rate increases or
otherwise. As a result of these factors, our cost of compliance could be substantial and could have a material
impact on our results of operations.
In January 2005, based on European Community “Directive 2003/87/EC on Greenhouse Gas Emission
Allowance Trading,” the European Union Greenhouse Gas Emission Trading Scheme (“EU ETS”) commenced
operation as the largest multi-country GHG emission trading scheme in the world. On February 16, 2005, the
Kyoto Protocol became effective. The Kyoto Protocol requires the 40 developed countries that have ratified it to
substantially reduce their GHG emissions, including CO2. To date, compliance with the Kyoto Protocol and the
EU ETS has not had a material adverse effect on the Company’s consolidated results of operations, financial
condition and cash flows.
The United States has not ratified the Kyoto Protocol. In the United States, there currently is no legislation
establishing federal mandatory GHG emission reduction programs (including CO2) affecting the electric power
generation facilities of the Company’s subsidiaries. However, federal GHG legislation has been proposed in the
United States Congress that would, if enacted, constrain GHG emissions, including CO2, and/or impose costs on
94
us that could be material to our business or results of operations. The EPA has also initiated regulations
pertaining to GHG emissions that require new sources of GHG emissions of over 100,000 tons per year, and
existing sources planning physical changes that would increase their GHG emissions by more than 75,000 tons
per year, to obtain new source review permits from the EPA prior to construction or modification.
Such regulations could increase our costs directly and indirectly and have a material adverse effect on our
business and/or results of operations. See Item 1. Business—Regulatory Matters—Environmental and Land Use
Regulations of this Form 10-K for further discussion about these environmental agreements, laws and
regulations.
At the state level, RGGI, a cap-and-trade program covering CO2 emissions from electric power generation
facilities in the Northeast, became effective in January 2009, and the WCI is also developing market-based
programs to address GHG emissions in seven western states. In addition, several states, including California,
have adopted comprehensive legislation that, when effective, will require mandatory GHG reductions from
several industrial sectors, including the electric power generation industry. See Item 1.—Business—Regulatory
Matters—Environmental and Land Use Regulations of this Form 10-K for further discussion about the United
States state environmental regulations we face. At this time, other than with regard to RGGI (further described
below), the Company cannot estimate the costs of compliance with United States federal, regional or state CO2
emissions reduction legislation or initiatives, due to the fact that these proposals are in earlier stages of
development and any final regulations or legislation, if adopted, could vary drastically from current proposals.
The RGGI program became effective in January 2009. The first regional auction of RGGI allowances
needed to be acquired by power generators to comply with state programs implementing RGGI was held in
September 2008, with subsequent auctions occurring approximately every quarter. Our subsidiaries in New York,
New Jersey, Connecticut and Maryland are subject to RGGI. Of the approximately 40 million metric tonnes of
CO2 emitted in the United States by our subsidiaries in 2010 (ownership adjusted), approximately 11.3 million
metric tonnes were emitted in United States states participating in RGGI. Over the past three years, such
emissions have averaged approximately 10.9 million metric tonnes. While CO2 emissions from businesses
operated by subsidiaries of the Company are calculated globally in metric tonnes, RGGI allowances are
denominated in short tons. (1 metric tonne equals 2,200 pounds and 1 short ton equals 2,000 pounds.) For
forecasting purposes, the Company has modeled the impact of CO2 compliance based on a 3-year average of CO2
emissions for its businesses that are subject to RGGI and that may not be able to pass through compliance costs.
The model includes a conversion from metric tonnes to short tons as well as the impact of some market recovery
by merchant plants and contractual and regulatory provisions. The model also utilizes a price of $1.86 per
allowance under RGGI. The source of this allowance price estimate was the clearing price in the recent RGGI
allowance auction held in December 2010. Based on these assumptions, the Company estimates that the RGGI
compliance costs could be approximately $15 million for 2011, which is the last year of the first RGGI
compliance period. Given the fact that the assumptions utilized in the model may prove to be incorrect, there is a
significant risk that our actual compliance costs under RGGI will differ from our estimates by a material amount
and that our model could underestimate our costs of compliance.
In addition to government regulators, other groups such as politicians, environmentalists and other private
parties have expressed increasing concern about GHG emissions. For example, certain financial institutions have
expressed concern about providing financing for facilities which would emit GHGs, which can affect our ability
to obtain capital, or if we can obtain capital, to receive it on commercially viable terms. In addition, rating
agencies may decide to downgrade our credit ratings based on the emissions of the businesses operated by our
subsidiaries or increased compliance costs which could make financing unattractive. In addition, environmental
groups and other private plaintiffs have brought and may decide to bring additional private lawsuits against the
Company because of its subsidiaries’ GHG emissions. The Company is facing and may face in the future private
lawsuits relating to GHG emissions that may have a material impact on the Company’s results of operations. In
one recent case in the United States, which does not involve the Company, a federal appellate court reversed the
dismissal by a federal district court of nuisance and other claims against emitters of GHG based on property
damage allegedly caused by their contributions to global warming. While the scope of relief sought in that case is
95
unclear, the plaintiffs in this case evidently seek injunctive relief to prevent or reduce further GHG emissions.
The defendants appealed the appellate court decision to the Supreme Court of the United States, and the Supreme
Court is expected to render a decision in 2011. If the defendants do not prevail, other parties may be encouraged
to bring similar suits against electric power generators, including the Company or any of its United States
subsidiaries. Also, unless the United States Congress acts to preempt such suits as part of comprehensive federal
legislation, additional lawsuits may be brought against the Company or its subsidiaries. At this stage of the
litigation, it is impossible to predict whether such lawsuits are likely to prevail or result in damages awards.
Consequently, it is impossible to determine whether such lawsuits are likely to have a material adverse effect on
the Company’s consolidated results of operations and financial condition.
Furthermore, according to the Intergovernmental Panel on Climate Change, physical risks from climate
change could include, but are not limited to, increased runoff and earlier spring peak discharge in many glacier
and snow fed rivers, warming of lakes and rivers, an increase in sea level, changes and variability in precipitation
and in the intensity and frequency of extreme weather events. Physical impacts may have the potential to
significantly affect the Company’s business and operations, and any such potential impact may render it more
difficult for our businesses to obtain financing. For example, extreme weather events could result in increased
downtime and operation and maintenance costs at the electric power generation facilities and support facilities of
the Company’s subsidiaries. Variations in weather conditions, primarily temperature and humidity also would be
expected to affect the energy needs of customers. A decrease in energy consumption could decrease the revenues
of the Company’s subsidiaries. In addition, while revenues would be expected to increase if the energy
consumption of customers increased, such increase could prompt the need for additional investment in generation
capacity. Changes in the temperature of lakes and rivers and changes in precipitation that result in drought could
adversely affect the operations of the fossil-fuel fired electric power generation facilities of the Company’s
subsidiaries. Changes in temperature, precipitation and snow pack conditions also could affect the amount and
timing of hydroelectric generation.
In addition to potential physical risks noted by the Intergovernmental Panel on Climate Change, there could
be damage to the reputation of the Company and its subsidiaries due to public perception of GHG emissions by
the Company or any of its subsidiaries, and any such negative public perception or concerns could ultimately
result in a decreased demand for electric power generation or distribution from our subsidiaries. The level of
GHG emissions made by subsidiaries of the Company is not a factor in the compensation of executives of the
Company.
If any of the foregoing risks materialize, costs may increase or revenues may decrease and there could be a
material adverse effect on the electric power generation businesses of the Company’s subsidiaries and on the
Company’s consolidated results of operations, financial condition and cash flows.
Tax legislation initiatives or challenges to our tax positions could adversely affect our results of
operations and financial condition.
Our subsidiaries have operations in the United States and various non-United States jurisdictions. As such,
we are subject to the tax laws and regulations of the United States federal, state and local governments and of
many non-United States jurisdictions. From time to time, legislative measures may be enacted that could
adversely affect our overall tax positions. There can be no assurance that our effective tax rate or tax payments
will not be adversely affected by these initiatives. In addition, United States federal, state and local, as well as
non-United States, tax laws and regulations are extremely complex and subject to varying interpretations. There
can be no assurance that our tax positions will be sustained if challenged by relevant tax authorities.
We and our affiliates are subject to material litigation and regulatory proceedings.
We and our affiliates are parties to material litigation and regulatory proceedings. See Item 3.—Legal
Proceedings below. There can be no assurances that the outcome of such matters will not have a material adverse
effect on our consolidated financial position.
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The SEC is conducting an informal inquiry relating to our restatements.
We have been cooperating with an informal inquiry by the SEC Staff concerning our past restatements and
related matters, and have been providing information and documents to the SEC Staff on a voluntary basis.
Although we have not received correspondence regarding this inquiry for some time, we have not been advised
that the matter is closed. Because we are unable to predict the outcome of this inquiry, the SEC Staff may
disagree with the manner in which we have accounted for and reported the financial impact of the adjustments to
previously filed financial statements and there may be a risk that the inquiry by the SEC could lead to
circumstances in which we may have to further restate previously filed financial statements, amend prior filings
or take other actions not currently contemplated.
ITEM 1B. UNRESOLVED STAFF COMMENTS

None.
ITEM 2. PROPERTIES
We maintain offices in many places around the world, generally pursuant to the provisions of long- and
short-term leases, none of which we believe are material. With a few exceptions, our facilities, which are
described in Item 1 of this Form 10-K, are subject to mortgages or other liens or encumbrances as part of the
project’s related finance facility. In addition, the majority of our facilities are located on land that is leased.
However, in a few instances, no accompanying project financing exists for the facility, and in a few of these
cases, the land interest may not be subject to any encumbrance and is owned outright by the subsidiary or
affiliate.
ITEM 3. LEGAL PROCEEDINGS

The Company is involved in certain claims, suits and legal proceedings in the normal course of business,
some of which are described below. The Company has accrued for litigation and claims where it is probable that
a liability has been incurred and the amount of loss can be reasonably estimated. The Company has evaluated
claims in accordance with the accounting guidance for contingencies that it deems both probable and reasonably
estimable and accordingly, has recorded aggregate reserves for all claims for approximately $450 million and
$482 million as of December 31, 2010 and 2009. These are reported on the Consolidated Balance Sheet within
“accrued and other liabilities” and “other long-term liabilities.” A significant portion of these reserves relate to
employment, non-income tax and customer disputes in international jurisdictions, principally Brazil. Certain of
the Company’s subsidiaries, principally in Brazil, are defendants in a number of labor and employment lawsuits.
The complaints generally seek unspecified monetary damages, injunctive relief, or other relief. The subsidiaries
have denied any liability and intend to vigorously defend themselves in all of these proceedings. There can be no
assurance that this reserve will be adequate to cover all existing and future claims or that we will have the
liquidity to pay such claims as they arise.
The Company believes, based upon information it currently possesses and taking into account established
reserves for liabilities and its insurance coverage, that the ultimate outcome of these proceedings and actions is
unlikely to have a material effect on the Company’s financial statements. However, even where no reserve has
been recognized, it is reasonably possible that some matters could be decided unfavorably to the Company, and
could require the Company to pay damages or make expenditures in amounts that could be material.
In 1989, Centrais Elétricas Brasileiras S.A. (“Eletrobrás”) filed suit in the Fifth District Court in the State of
Rio de Janeiro against Eletropaulo Eletricidade de São Paulo S.A. (“EEDSP”) relating to the methodology for
calculating monetary adjustments under the parties’ financing agreement. In April 1999, the Fifth District Court
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found for Eletrobrás and in September 2001, Eletrobrás initiated an execution suit in the Fifth District Court to
collect approximately R$1.10 billion ($659 million) from Eletropaulo (as estimated by Eletropaulo) and a lesser
amount from an unrelated company, Companhia de Transmissão de Energia Elétrica Paulista (“CTEEP”)
(Eletropaulo and CTEEP were spun off from EEDSP pursuant to its privatization in 1998). In November 2002,
the Fifth District Court rejected Eletropaulo’s defenses in the execution suit. Eletropaulo appealed and in
September 2003, the Appellate Court of the State of Rio de Janeiro (“AC”) ruled that Eletropaulo was not a
proper party to the litigation because any alleged liability had been transferred to CTEEP pursuant to the
privatization. In June 2006, the Superior Court of Justice (“SCJ”) reversed the Appellate Court’s decision and
remanded the case to the Fifth District Court for further proceedings, holding that Eletropaulo’s liability, if any,
should be determined by the Fifth District Court. Eletropaulo’s subsequent appeals to the Special Court (the
highest court within the SCJ) and the Supreme Court of Brazil were dismissed. Eletrobrás later requested that the
amount of Eletropaulo’s alleged debt be determined by an accounting expert appointed by the Fifth District
Court. Eletropaulo consented to the appointment of such an expert, subject to a reservation of rights. In February
2010, the Fifth District Court appointed an accounting expert to determine the amount of the alleged debt and the
responsibility for its payment in light of the privatization, in accordance with the methodology proposed by
Eletrobrás. Pursuant to its reservation of rights, Eletropaulo filed an interlocutory appeal with the AC asserting
that the expert was required to determine the issues in accordance with the methodology proposed by
Eletropaulo, and that Eletropaulo should be entitled to take discovery and present arguments on the issues to be
determined by the expert. In April 2010, the AC issued a decision agreeing with Eletropaulo’s arguments and
directing the Fifth District Court to proceed accordingly. Eletrobrás may restart the accounting proceedings at the
Fifth District Court at any time, which would proceed according to the AC’s April 2010 decision. In the Fifth
District Court proceedings, the expert’s conclusions will be subject to the Fifth District Court’s review and
approval. If Eletropaulo is determined to be responsible for the debt, after the amount of the alleged debt is
determined, Eletrobrás will be entitled to resume the execution suit in the Fifth District Court at any time. If
Eletrobrás does so, Eletropaulo will be required to provide security in the amount of its alleged liability. In that
case, if Eletrobrás requests the seizure of such security and the Fifth District Court grants such request,
Eletropaulo’s results of operations may be materially adversely affected, and in turn the Company’s results of
operations could be materially adversely affected. In addition, in February 2008, CTEEP filed a lawsuit in the
Fifth District Court against Eletrobrás and Eletropaulo seeking a declaration that CTEEP is not liable for any
debt under the financing agreement. The parties are disputing the proper venue for the CTEEP lawsuit.
Eletropaulo believes it has meritorious defenses to the claims asserted against it and will defend itself vigorously
in these proceedings; however, there can be no assurances that it will be successful in its efforts.
In August 2000, the FERC announced an investigation into the organized California wholesale power
markets to determine whether rates were just and reasonable. Further investigations involved alleged market
manipulation. FERC requested documents from each of the AES Southland, LLC plants and AES Placerita, Inc.
AES Southland and AES Placerita have cooperated fully with the FERC investigations. AES Southland was not
subject to refund liability because it did not sell into the organized spot markets due to the nature of its tolling
agreement. After hearings at FERC, AES Placerita was found subject to refund liability of $588,000 plus interest
for spot sales to the California Power Exchange from October 2, 2000 to June 20, 2001. As FERC investigations
and hearings progressed, numerous appeals on related issues were filed with the U.S. Court of Appeals for the
Ninth Circuit. Over the years, the Ninth Circuit issued several opinions that had the potential to expand the scope
of the FERC proceedings and increase refund exposure for AES Placerita and other sellers of electricity.
Following remand of one of the Ninth Circuit appeals in March 2009, FERC started a new hearing process
involving AES Placerita and other sellers. In May 2009, AES Placerita entered into a settlement, approved by
FERC in July 2009, concerning the claims before FERC against AES Placerita relating to the California energy
crisis of 2000-2001, including the California refund proceeding. Pursuant to the settlement, AES Placerita paid
$6 million and assigned a receivable of $168,119 due to it from the California Power Exchange in return for a
release of all claims against it at FERC by the settling parties and other consideration. More than 98% of the
buyers in the market elected to join the settlement. A small amount of AES Placerita’s settlement payment was
placed in escrow for buyers that did not join the settlement (“non-settling parties”). It is unclear whether the
escrowed funds will be enough to satisfy any additional sums that might be determined to be owed to
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non-settling parties at the conclusion of the FERC proceedings concerning the California energy crisis. However,
any such additional sums are expected to be immaterial to the Company’s consolidated financial statements. In
November 2009, one non-settling party, the Sacramento Municipal Utility District (“SMUD”), filed an appeal of
the FERC’s approval of the settlement which is pending in the Ninth Circuit. SMUD’s appeal has been stayed
pending further order of the court. The settlement agreement is still effective and will continue to remain
effective unless it is vacated by the Ninth Circuit. SMUD has reached a settlement in principal with buyers of
electricity that, if approved by FERC, will leave only immaterial claims of non-settling parties against AES
Placerita.
In August 2001, the Grid Corporation of Orissa, India, now Gridco Ltd. (“Gridco”), filed a petition against
the Central Electricity Supply Company of Orissa Ltd. (“CESCO”), an affiliate of the Company, with the Orissa
Electricity Regulatory Commission (“OERC”), alleging that CESCO had defaulted on its obligations as an
OERC-licensed distribution company, that CESCO management abandoned the management of CESCO, and
asking for interim measures of protection, including the appointment of an administrator to manage CESCO.
Gridco, a state-owned entity, is the sole wholesale energy provider to CESCO. Pursuant to the OERC’s
August 2001 order, the management of CESCO was replaced with a government administrator who was
appointed by the OERC. The OERC later held that the Company and other CESCO shareholders were not
necessary or proper parties to the OERC proceeding. In August 2004, the OERC issued a notice to CESCO, the
Company and others giving the recipients of the notice until November 2004 to show cause why CESCO’s
distribution license should not be revoked. In response, CESCO submitted a business plan to the OERC. In
February 2005, the OERC issued an order rejecting the proposed business plan. The order also stated that the
CESCO distribution license would be revoked if an acceptable business plan for CESCO was not submitted to
and approved by the OERC prior to March 31, 2005. In its April 2, 2005 order, the OERC revoked the CESCO
distribution license. CESCO has filed an appeal against the April 2, 2005 OERC order and that appeal remains
pending in the Indian courts. In addition, Gridco asserted that a comfort letter issued by the Company in
connection with the Company’s indirect investment in CESCO obligates the Company to provide additional
financial support to cover all of CESCO’s financial obligations to Gridco. In December 2001, Gridco served a
notice to arbitrate pursuant to the Indian Arbitration and Conciliation Act of 1996 on the Company, AES Orissa
Distribution Private Limited (“AES ODPL”), and Jyoti Structures (“Jyoti”) pursuant to the terms of the CESCO
Shareholders Agreement between Gridco, the Company, AES ODPL, Jyoti and CESCO (the “CESCO
arbitration”). In the arbitration, Gridco appeared to be seeking approximately $189 million in damages, plus
undisclosed penalties and interest, but a detailed alleged damage analysis was not filed by Gridco. The Company
counterclaimed against Gridco for damages. In June 2007, a 2-to-1 majority of the arbitral tribunal rendered its
award rejecting Gridco’s claims and holding that none of the respondents, the Company, AES ODPL, or Jyoti,
had any liability to Gridco. The respondents’ counterclaims were also rejected. In September 2007, Gridco filed a
challenge of the arbitration award with the local Indian court. In June 2008, Gridco filed a separate application
with the local Indian court for an order enjoining the Company from selling or otherwise transferring its shares in
Orissa Power Generation Corporation Ltd.’s (“OPGC”), an equity method investment, and requiring the
Company to provide security in the amount of the contested damages in the CESCO arbitration until Gridco’s
challenge to the arbitration award is resolved. In June 2010, a 2-to-1 majority of the arbitral tribunal awarded the
Company some of its costs relating to the arbitration. In August 2010, Gridco filed a challenge of the cost award
with the local Indian court. The Company believes that it has meritorious defenses to the claims asserted against
it and will defend itself vigorously in these proceedings; however, there can be no assurances that it will be
successful in its efforts.
In early 2002, Gridco made an application to the OERC requesting that the OERC initiate proceedings
regarding the terms of OPGC’s existing PPA with Gridco. In response, OPGC filed a petition in the Indian courts
to block any such OERC proceedings. In early 2005, the Orissa High Court upheld the OERC’s jurisdiction to
initiate such proceedings as requested by Gridco. OPGC appealed that High Court’s decision to the Supreme
Court and sought stays of both the High Court’s decision and the underlying OERC proceedings regarding the
PPAs terms. In April 2005, the Supreme Court granted OPGC’s requests and ordered stays of the High Court’s
decision and the OERC proceedings with respect to the PPA’s terms. The matter is awaiting further hearing.
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Unless the Supreme Court finds in favor of OPGC’s appeal or otherwise prevents the OERC’s proceedings
regarding the PPA’s terms, the OERC will likely lower the tariff payable to OPGC under the PPA, which would
have an adverse impact on OPGC’s financials. OPGC believes that it has meritorious claims and defenses and
will assert them vigorously in these proceedings; however, there can be no assurances that it will be successful in
its efforts.
In March 2003, the office of the Federal Public Prosecutor for the State of São Paulo, Brazil (“MPF”)
notified AES Eletropaulo that it had commenced an inquiry related to the BNDES financings provided to AES
Elpa and AES Transgás and the rationing loan provided to Eletropaulo, changes in the control of Eletropaulo,
sales of assets by Eletropaulo and the quality of service provided by Eletropaulo to its customers, and requested
various documents from Eletropaulo relating to these matters. In July 2004, the MPF filed a public civil lawsuit
in the Federal Court of São Paulo (“FSCP”) alleging that BNDES violated Law 8429/92 (the Administrative
Misconduct Act) and BNDES’s internal rules by: (1) approving the AES Elpa and AES Transgás loans;
(2) extending the payment terms on the AES Elpa and AES Transgás loans; (3) authorizing the sale of
Eletropaulo’s preferred shares at a stock-market auction; (4) accepting Eletropaulo’s preferred shares to secure
the loan provided to Eletropaulo; and (5) allowing the restructurings of Light Serviços de Eletricidade S.A. and
Eletropaulo. The MPF also named AES Elpa and AES Transgás as defendants in the lawsuit because they
allegedly benefited from BNDES’s alleged violations. In May 2006, the FCSP ruled that the MPF could pursue
its claims based on the first, second, and fourth alleged violations noted above. The MPF subsequently filed an
interlocutory appeal with the Federal Court of Appeals (“FCA”) seeking to require the FCSP to consider all five
alleged violations. Also, in July 2006, AES Elpa and AES Transgás filed an interlocutory appeal with the FCA,
which was subsequently consolidated with the MPF’s interlocutory appeal, seeking a transfer of venue and to
enjoin the FCSP from considering any of the alleged violations. In June 2009, the FCA granted the injunction
sought by AES Elpa and AES Transgás and transferred the case to the Federal Court of Rio de Janeiro. In May
2010, the MPF filed an appeal with the Superior Court of Justice challenging the transfer. The MPF’s lawsuit
before the FCSP has been stayed pending a final decision on the interlocutory appeals. AES Elpa and AES
Brasiliana (the successor of AES Transgás) believe they have meritorious defenses to the allegations asserted
against them and will defend themselves vigorously in these proceedings; however, there can be no assurances
that they will be successful in their efforts.
AES Florestal, Ltd. (“Florestal”), had been operating a pole factory and had other assets, including a
wooded area known as “Horto Renner,” in the State of Rio Grande do Sul, Brazil (collectively, “Property”).
Florestal had been under the control of AES Sul (“Sul”) since October 1997, when Sul was created pursuant to a
privatization by the Government of the State of Rio Grande do Sul. After it came under the control of Sul,
Florestal performed an environmental audit of the entire operational cycle at the pole factory. The audit
discovered 200 barrels of solid creosote waste and other contaminants at the pole factory. The audit concluded
that the prior operator of the pole factory, Companhia Estadual de Energia Elétrica (“CEEE”), had been using
those contaminants to treat the poles that were manufactured at the factory. Sul and Florestal subsequently took
the initiative of communicating with Brazilian authorities, as well as CEEE, about the adoption of containment
and remediation measures. The Public Attorney’s Office has initiated a civil inquiry (Civil Inquiry n. 24/05) to
investigate potential civil liability and has requested that the police station of Triunfo institute a police
investigation (IP number 1041/05) to investigate potential criminal liability regarding the contamination at the
pole factory. The parties filed defenses in response to the civil inquiry. The Public Attorney’s Office then
requested an injunction which the judge rejected on September 26, 2008. The Public Attorney’s office has a right
to appeal the decision. The environmental agency (“FEPAM”) has also started a procedure (Procedure n.
088200567/059) to analyze the measures that shall be taken to contain and remediate the contamination. Also, in
March 2000, Sul filed suit against CEEE in the 2nd Court of Public Treasure of Porto Alegre seeking to register
in Sul’s name the Property that it acquired through the privatization but that remained registered in CEEE’s
name. During those proceedings, AES subsequently waived its claim to re-register the Property and asserted a
claim to recover the amounts paid for the Property. That claim is pending. In November 2005, the 7th Court of
Public Treasure of Porto Alegre ruled that the Property must be returned to CEEE. CEEE has had sole possession
of Horto Renner since September 2006 and of the rest of the Property since April 2006. In February 2008, Sul
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and CEEE signed a “Technical Cooperation Protocol” pursuant to which they requested a new deadline from
FEPAM in order to present a proposal. In March 2008, the State Prosecution office filed a Public Class Action
against AES Florestal, AES Sul and CEEE, requiring an injunction for the removal of the alleged sources of
contamination and the payment of an indemnity in the amount of R$6 million ($4 million). The injunction was
rejected and the case is in the evidentiary stage awaiting the judge’s determination concerning the production of
expert evidence. The above-referenced proposal was delivered on April 8, 2008. FEPAM responded by
indicating that the parties should undertake the first step of the proposal which would be to retain a contractor. In
its response, Sul indicated that such step should be undertaken by CEEE as the relevant environmental events
resulted from CEEE’s operations. It is estimated that remediation could cost approximately R$14.7 million
($9 million). Discussions between Sul and CEEE are ongoing.
In January 2004, the Company received notice of a “Formulation of Charges” filed against the Company by
the Superintendence of Electricity of the Dominican Republic. In the “Formulation of Charges,” the
Superintendence asserts that the existence of three generation companies (Empresa Generadora de Electricidad
Itabo, S.A. (“Itabo”), Dominican Power Partners, and AES Andres BV) and one distribution company (Empresa
Distribuidora de Electricidad del Este, S.A. (“Este”)) in the Dominican Republic, violates certain cross-
ownership restrictions contained in the General Electricity Law of the Dominican Republic. In February 2004,
the Company filed in the First Instance Court of the National District of the Dominican Republic an action
seeking injunctive relief based on several constitutional due process violations contained in the “Formulation of
Charges” (“Constitutional Injunction”). In February 2004, the Court granted the Constitutional Injunction and
ordered the immediate cessation of any effects of the “Formulation of Charges,” and the enactment by the
Superintendence of Electricity of a special procedure to prosecute alleged antitrust complaints under the General
Electricity Law. In March 2004, the Superintendence of Electricity appealed the Court’s decision. In July 2004,
the Company divested any interest in Este. The Superintendence of Electricity’s appeal is pending. The Company
believes it has meritorious defenses to the claims asserted against it and will defend itself vigorously in these
proceedings; however, there can be no assurances that it will be successful in its efforts.
In July 2004, the Corporación Dominicana de Empresas Eléctricas Estatales (“CDEEE”) filed lawsuits
against Itabo, an affiliate of the Company, in the First and Fifth Chambers of the Civil and Commercial Court of
First Instance for the National District. CDEEE alleges in both lawsuits that Itabo spent more than was necessary
to rehabilitate two generation units of an Itabo power plant and, in the Fifth Chamber lawsuit, that those funds
were paid to affiliates and subsidiaries of AES Gener and Coastal Itabo, Ltd. (“Coastal”), a former shareholder of
Itabo, without the required approval of Itabo’s board of administration. In the First Chamber lawsuit, CDEEE
seeks an accounting of Itabo’s transactions relating to the rehabilitation. In November 2004, the First Chamber
dismissed the case for lack of legal basis. On appeal, in October 2005 the Court of Appeals of Santo Domingo
ruled in Itabo’s favor, reasoning that it lacked jurisdiction over the dispute because the parties’ contracts
mandated arbitration. The Supreme Court of Justice is considering CDEEE’s appeal of the Court of Appeals’
decision. In the Fifth Chamber lawsuit, which also names Itabo’s former president as a defendant, CDEEE seeks
$15 million in damages and the seizure of Itabo’s assets. In October 2005, the Fifth Chamber held that it lacked
jurisdiction to adjudicate the dispute given the arbitration provisions in the parties’ contracts. The First Chamber
of the Court of Appeal ratified that decision in September 2006. In a related proceeding, in May 2005, Itabo filed
a lawsuit in the U.S. District Court for the Southern District of New York seeking to compel CDEEE to arbitrate
its claims. The petition was denied in July 2005. Itabo’s appeal of that decision to the U.S. Court of Appeals for
the Second Circuit has been stayed since September 2006. Further, in September 2006, in an International
Chamber of Commerce arbitration, an arbitral tribunal determined that it lacked jurisdiction to decide arbitration
claims concerning these disputes. Itabo believes it has meritorious claims and defenses and will assert them
vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts.
In April 2006, a putative class action was filed in the U.S. District Court for the Southern District of
Mississippi (“District Court”) on behalf of certain individual plaintiffs and all residents and/or property owners in
the State of Mississippi who allegedly suffered harm as a result of Hurricane Katrina, and against the Company
and numerous unrelated companies, whose alleged greenhouse gas emissions contributed to alleged global
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warming which, in turn, allegedly increased the destructive capacity of Hurricane Katrina. The plaintiffs assert
unjust enrichment, civil conspiracy/aiding and abetting, public and private nuisance, trespass, negligence, and
fraudulent misrepresentation and concealment claims against the defendants. The plaintiffs seek damages relating
to loss of property, loss of business, clean-up costs, personal injuries and death, but do not quantify their alleged
damages. In August 2007, the District Court dismissed the case. The plaintiffs subsequently appealed to the U.S.
Court of Appeals for the Fifth Circuit, which, in October 2009, affirmed the District Court’s dismissal of the
plaintiffs’ unjust enrichment, fraudulent misrepresentation, and civil conspiracy claims. However, the Fifth
Circuit reversed the District Court’s dismissal of the plaintiffs’ public and private nuisance, trespass, and
negligence claims, and remanded those claims to the District Court for further proceedings. In February 2010, the
Fifth Circuit granted the petitions for en banc rehearing filed by the Company and other defendants, and thereby
vacated its October 2009 decision. In May 2010, the Fifth Circuit dismissed the appeal on the ground that it had
lost its quorum for en banc review. In August 2010, the plaintiffs filed a petition for a writ of mandamus in the
U.S. Supreme Court, requesting the Supreme Court to direct the Fifth Circuit to reinstate the appeal and return it
to the panel that issued the October 2009 decision. In January 2011, the Supreme Court denied the petition,
ending the case.
In July 2007, the Competition Committee of the Ministry of Industry and Trade of the Republic of
Kazakhstan (the “Competition Committee”) ordered Nurenergoservice, an AES subsidiary, to pay approximately
KZT 18 billion ($120 million) for alleged antimonopoly violations in 2005 through the first quarter of 2007. The
Competition Committee’s order was affirmed by the economic court in April 2008 (“April 2008 Decision”). The
economic court also issued an injunction to secure Nurenergoservice’s alleged liability, freezing
Nurenergoservice’s bank accounts and prohibiting Nurenergoservice from transferring or disposing of its
property. Nurenergoservice’s subsequent appeals to the court of appeals were rejected. In February 2009, the
Antimonopoly Agency (the Competition Committee’s successor) seized approximately KZT 783 million ($5
million) from a frozen Nurenergoservice bank account in partial satisfaction of Nurenergoservice’s alleged
damages liability. However, on appeal to the Kazakhstan Supreme Court, in October 2009, the Supreme Court
annulled the decisions of the lower courts because of procedural irregularities and remanded the case to the
economic court for reconsideration. On remand, in January 2010, the economic court reaffirmed its April 2008
Decision. Nurenergoservice’s appeals in the court of appeals (first panel) and the court of appeals (second panel)
were unsuccessful. Nurenergoservice intends to file a further appeal to the Kazakhstan Supreme Court. In
separate but related proceedings, in August 2007, the Competition Committee ordered Nurenergoservice to pay
approximately KZT 1.8 billion ($12 million) in administrative fines for its alleged antimonopoly violations.
Nurenergoservice’s appeal to the administrative court was rejected in February 2009. Given the adverse court
decisions against Nurenergoservice, the Antimonopoly Agency may attempt to seize Nurenergoservice’s
remaining assets, which are immaterial to the Company’s consolidated financial statements. The Antimonopoly
Agency has not indicated whether it intends to assert claims against Nurenergoservice for alleged antimonopoly
violations post first quarter 2007. Nurenergoservice believes it has meritorious defenses to the claims asserted
against it; however, there can be no assurances that it will prevail in these proceedings.
In April 2009, the Antimonopoly Agency initiated an investigation of the power sales of Ust-Kamenogorsk
HPP (“UK HPP”) and Shulbinsk HPP, hydroelectric plants under AES concession (collectively, the “Hydros”),
in January through February 2009. The investigation of Shulbinsk HPP is ongoing, but the investigation of UK
HPP has been completed. The Antimonopoly Agency determined that UK HPP abused its market position and
charged monopolistically high prices for power in January through February 2009. The Agency sought an order
from the administrative court requiring UK HPP to pay an administrative fine of approximately KZT 120 million
($1 million) and to disgorge profits for the period at issue, estimated by the Antimonopoly Agency to be
approximately KZT 440 million ($3 million). No fines or damages have been paid to date, however, as the
proceedings in the administrative court have been suspended due to the initiation of related criminal proceedings
against officials of UK HPP. The Hydros believe they have meritorious defenses and will assert them vigorously
in these proceedings; however, there can be no assurances that they will be successful in their efforts.
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In April 2009, the Antimonopoly Agency initiated an investigation of Ust-Kamenogorsk TETS LLP’s
(“UKT”) power sales in 2008 through February 2009. The Antimonopoly Agency subsequently concluded that
UKT abused its market position and charged monopolistically high prices for power and should pay an
administrative fine of approximately KZT 136 million ($1 million). The Antimonopoly Agency later sought an
order from the administrative court requiring UKT to pay the fine. The administrative court proceedings have
been suspended due to a related criminal investigation of UKT employees. If the investigation is terminated and
the Antimonopoly Agency prevails in the administrative proceedings, UKT may be ordered to pay the
administrative fine and disgorge the profits from the sales at issue, estimated by the Antimonopoly Agency to be
approximately 514 million KZT ($3 million). UKT believes it has meritorious defenses and will assert them
In December 2007, an arbitral tribunal terminated ESSA’s gas supply contracts with members of the Sierra
Chata Consortium in light of the restrictions that had been placed on the export of gas by the Argentine
Republic. ESSA thereafter terminated its gas transportation contract with Transportadora de Gas del Norte S.A.
(“TGN”), and initiated arbitration seeking relief from the obligation to pay the firm tariff under ESSA’s gas
transportation contracts with Gasoducto GasAndes (Argentina) S.A. (“GasAndes Argentina”) and Gasoducto
GasAndes S.A. (“GasAndes Chile”) or in the alternative, termination of such contracts. TGN (which later filed a
lawsuit against ESSA in Argentina), GasAndes Argentina, and GasAndes Chile disputed that the restrictions on
the export of gas justified the adjustment or termination of the respective gas transportation contracts and sought
due tariff payments. On December 29, 2010, ESSA reached settlement agreements with GasAndes Argentina,
GasAndes Chile, and TGN terminating the respective gas transportation contracts and resolving all pending legal
disputes and potential future claims. ESSA recognized approximately $72 million as other expense for the three
months ended December 31, 2010 related to the settlement agreements. Upon termination of the TGN gas
transportation contract, ESSA is no longer required to pay certain charges imposed by the Argentine Republic
relating to gas supply infrastructure.
In February 2008, the Native Village of Kivalina and the City of Kivalina, Alaska, filed a complaint in the
U.S. District Court for the Northern District of California against the Company and numerous unrelated
companies, claiming that the defendants’ alleged GHG emissions have contributed to alleged global warming
which, in turn, allegedly has led to the erosion of the plaintiffs’ alleged land. The plaintiffs assert nuisance and
concert of action claims against the Company and the other defendants, and a conspiracy claim against a subset
of the other defendants. The plaintiffs seek to recover relocation costs, indicated in the complaint to be from
$95 million to $400 million, and other unspecified damages from the defendants. The Company filed a motion to
dismiss the case, which the District Court granted in October 2009. The plaintiffs have appealed to the U.S.
Court of Appeals for the Ninth Circuit. The parties have briefed the appeal and are awaiting a date for oral
argument. The Company believes it has meritorious defenses to the claims asserted against it and will defend
itself vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts.
In July, 1993 the Public Attorney’s office filed a claim against Eletropaulo, the Sao Paulo State
Government, SABESP (a state-owned company), CETESB (a state-owned company) and DAEE (the municipal
Water and Electric Energy Department) alleging that they were liable for pollution of the Billings Reservoir as a
result of pumping water from the Pinheiros River into the Billings Reservoir. The events in question occurred
while Eletropaulo was a state-owned company. An initial lower court decision in 2007 found the parties liable for
the payment of approximately R$670 million ($401 million) for remediation. Eletropaulo subsequently appealed
the decision to the Appellate Court of the State of Sao Paulo which reversed the lower court decision. In 2009,
the Public Attorney’s Office has filed appeals to both Superior Court of Justice (“SCJ”) and the Supreme Court
(“SC”) and such appeals were answered by Eletropaulo in the fourth quarter of 2009. Eletropaulo believes it has
meritorious defenses to the claims asserted against it and will defend itself vigorously in these proceedings;
however, there can be no assurances that it will be successful in its efforts.
In September 1996, a public civil action was asserted against Eletropaulo and Associação Desportiva
Cultural Eletropaulo (the “Associação”) relating to alleged environmental damage caused by construction of the
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Associação near Guarapiranga Reservoir. The initial decision that was upheld by the Appellate Court of the State
of Sao Paulo in 2006 found that Eletropaulo should repair the alleged environmental damage by demolishing
certain construction and reforesting the area, and either sponsor an environmental project which would cost
approximately R$1 million ($599 thousand) as of December 31, 2010, or pay an indemnification amount of
approximately R$10.2 million ($6 million). Eletropaulo has appealed this decision to the Supreme Court and is
awaiting a decision.
In February 2009, a CAA Section 114 information request from the EPA regarding Cayuga and Somerset
was received. The request seeks various operating and testing data and other information regarding certain types
of projects at the Cayuga and Somerset facilities, generally for the time period from January 1, 2000 through the
date of the information request. This type of information request has been used in the past to assist the EPA in
determining whether a plant is in compliance with applicable standards under the CAA. Cayuga and Somerset
responded to the EPA’s information request in June 2009, and they are awaiting a response from the EPA
regarding their submittal. At this time, it is not possible to predict what impact, if any, this request may have on
the Company, its results of operations or its financial position.
On February 2, 2009, the Cayuga facility received a Notice of Violation from the New York State
Department of Environmental Conservation (“NYSDEC”) that the facility had exceeded the permitted volume
limit of coal ash that can be disposed of in the on-site landfill. Cayuga has met with NYSDEC and submitted a
Landfill Liner Demonstration Report to them. Such report found that the landfill has adequate engineering
integrity to support the additional coal ash and there is no inherent environmental threat. NYSDEC has indicated
they accept the finding of the report. A permit modification was approved by the NYSDEC on May 14, 2010 and
such permit modification allows for closure of this approximately 10-acre portion of the landfill. The
construction in accordance with the approved permit modification was completed in November 2010 and the
certification report for this construction project is currently being drafted to submit to the NYSDEC in the second
quarter of 2011. While at this time it is not possible to predict what impact, if any, this matter may have on the
Company, its results of operations or its financial position, based upon the discussions to date, the Company does
not believe the impact will be material.
In March 2009, AES Uruguaiana Empreendimentos S.A. (“AESU”) initiated arbitration in the International
Chamber of Commerce (“ICC”) against YPF S.A. (“YPF”) seeking damages and other relief relating to YPF’s
breach of the parties’ gas supply agreement (“GSA”). Thereafter, in April 2009, YPF initiated arbitration in the
ICC against AESU and two unrelated parties, Companhia de Gas do Esado do Rio Grande do Sul and
Transportador de Gas del Mercosur S.A. (“TGM”), claiming that AESU wrongfully terminated the GSA and
caused the termination of a transportation agreement (“TA”) between YPF and TGM (“YPF Arbitration”). YPF
seeks an unspecified amount of damages from AESU, a declaration that YPF’s performance was excused under
the GSA due to certain alleged force majeure events, or, in the alternative, a declaration that the GSA and the TA
should be terminated without a finding of liability against YPF because of the allegedly onerous obligations
imposed on YPF by those agreements. In addition, in the YPF Arbitration, TGM asserts that if it is determined
that AESU is responsible for the termination of the GSA, AESU is liable for TGM’s alleged losses, including
losses under the TA. The procedural schedules for the arbitrations have been established but the hearing dates
have not been scheduled to date. AESU believes it has meritorious defenses to the claims asserted against it and
will defend itself vigorously; however, there can be no assurances that it will be successful in its efforts.
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the Plant.
In June 2009, the Inter-American Commission on Human Rights of the Organization of American States
(“IACHR”) requested that the Republic of Panama suspend the construction of AES Changuinola S.A.’s
hydroelectric project (“Project”) until the bodies of the Inter-American human rights system can issue a final
decision on a petition (286/08) claiming that the construction violates the human rights of alleged indigenous
communities. In July 2009, Panama responded by informing the IACHR that it would not suspend construction
of the Project and requesting that the IACHR revoke its request. In June 2010, the Inter-American Court of
Human Rights vacated the IACHR’s request. With respect to the merits of the underlying petition, the IACHR
heard arguments by the communities and Panama in November 2009, but has not issued a decision to date. The
Company cannot predict Panama’s response to any determination on the merits of the petition by the bodies of
the Inter-American human rights system.
In July 2009, AES Energía Cartagena S.R.L. (“AES Cartagena”) received notices from the Spanish national
energy regulator, Comisión Nacional de Energía (“CNE”), stating that the proceeds of the sale of electricity from
AES Cartagena’s plant should be reduced by roughly the value of the CO2 allowances that were granted to AES
Cartagena for free for the years 2007, 2008, and the first half of 2009. In particular, the notices stated that CNE
intended to invoice AES Cartagena to recover that value, which CNE calculated as approximately €20 million
($27 million) for 2007-2008 and an amount to be determined for the first half of 2009. In September 2009, AES
Cartagena received invoices for €523,548 (approximately $694,000) for the allowances granted for free for 2007
and €19,907,248 (approximately $26 million) for 2008. In July 2010, AES Cartagena received an invoice for
approximately €5.4 million ($7 million) for the allowances granted for free for the first half of 2009. AES
Cartagena does not expect to be charged for CO2 allowances issued free of charge for subsequent periods. AES
Cartagena has paid the amounts invoiced and has filed challenges to the CNE’s demands in the Spanish judicial
system. There can be no assurances that the challenges will be successful. AES Cartagena has demanded
indemnification from its fuel supply and electricity toller, GDF-Suez, in relation to the CNE invoices under the
long-term energy agreement (the “Energy Agreement”) with GDF-Suez. However, GDF-Suez has disputed that it
is responsible for the CNE invoices under the Energy Agreement. Therefore, in September 2009, AES Cartagena
initiated arbitration against GDF-Suez, seeking to recover the payments made to CNE. In the arbitration, AES
Cartagena also seeks a determination that GDF-Suez is responsible for procuring and bearing the cost of CO2
allowances that are required to offset the CO2 emissions of AES Cartagena’s power plant, which is also in
dispute between the parties. To date, AES Cartagena has paid approximately €20 million ($27 million) for the
CO2 allowances that have been required to offset 2008 and 2009 CO2 emissions. AES Cartagena expects that
allowances will need to be purchased to offset emissions for subsequent years. The evidentiary hearing in the
arbitration took place from May 31-June 4, 2010, and closing arguments were heard on September 1, 2010. In
February 2011, the arbitral tribunal requested further briefing from the parties on certain issues in the arbitration.
If AES Cartagena does not prevail in the arbitration and is required to bear the cost of carbon compliance, its
results of operations could be materially adversely affected and, in turn, there could be a material adverse effect
on the Company and its results of operations. AES Cartagena believes it has meritorious claims and will assert
them vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts.
In September 2009, the Public Defender’s Office of the State of Rio Grande do Sul (“PDO”) filed a class
action against AES Sul in the 16th District Court of Porto Alegre, Rio Grande do Sul (“District Court”), claiming
that AES Sul has been illegally passing PIS and COFINS taxes (taxes based on AES Sul’s income) to consumers.
According to ANEEL’s Order No. 93/05, the federal laws of Brazil, and the Brazilian Constitution, energy
companies such as AES Sul are entitled to highlight PIS and COFINS taxes in power bills to final consumers, as
the cost of those taxes is included in the energy tariffs that are applicable to final consumers. Before AES Sul had
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been served with the action, the District Court dismissed the lawsuit in October 2009 on the ground that AES Sul
had been properly highlighting PIS and COFINS taxes in consumer bills in accordance with Brazilian law. In
April 2010, the PDO appealed to the Appellate Court of the State of Rio Grande do Sul (“AC”). In November
2010, the AC affirmed the dismissal. The PDO is expected to appeal. If the dismissal is ever reversed and AES
Sul does not prevail in the lawsuit and is ordered to cease recovering PIS and COFINS taxes pursuant to its
energy tariff, its potential prospective losses could be approximately R$9.6 million ($6 million) per month, as
estimated by AES Sul. In addition, if AES Sul is ordered to reimburse consumers, its potential retrospective
liability could be approximately R$1.2 billion ($718 million), as estimated by AES Sul. AES Sul believes it has
meritorious defenses to the claims asserted against it and will defend itself vigorously in these proceedings if it is
served with the action; however, there can be no assurances that it would be successful in its efforts.
Furthermore, if AES Sul does not prevail in the litigation it will seek to adjust its energy tariff to compensate it
for its losses, but there can be no assurances that it would be successful in obtaining an adjusted energy tariff.
In October 2009, IPL received a Notice of Violation (“NOV”) and Finding of Violation from EPA pursuant
to CAA Section 113(a). The NOV alleges violations of the CAA at IPL’s three coal-fired electric generating
facilities dating back to 1986. The alleged violations primarily pertain to EPA’s Prevention of Significant
Deterioration and nonattainment New Source Review (“NSR”) requirements under the CAA. Since receiving the
letter, IPL management has met with EPA staff and is currently in discussions with the EPA regarding possible
resolutions to this NOV. At this time, we cannot predict the ultimate resolution of this matter. However,
settlements and litigated outcomes of similar cases have required companies to pay civil penalties and to install
additional pollution control technology on coal-fired electric generating units. A similar outcome in this case
could have a material impact to IPL and could, in turn, have a material impact on the Company. IPL would seek
recovery through customer rates of any operating or capital expenditures related to pollution control technology
systems to reduce regulated air emissions; however, there can be no assurances that it would be successful in that
regard.
In November 2009, April 2010 and December 2010, substantially similar personal injury lawsuits were filed
by a total of 26 residents and estates in the Dominican Republic against the Company, AES Atlantis, Inc., AES
Puerto Rico, LP, AES Puerto Rico, Inc., and AES Puerto Rico Services, Inc., in the Superior Court for the State
of Delaware. In each lawsuit the plaintiffs allege that the coal combustion byproducts of AES Puerto Rico’s
power plant were illegally placed in the Dominican Republic in October 2003 through March 2004 and
subsequently caused the plaintiffs’ birth defects, other personal injuries, and/or deaths. The plaintiffs do not
quantify their alleged damages, but generally allege that they are entitled to compensatory and punitive damages.
The AES defendants have moved for partial dismissal of both the November 2009 and April 2010 lawsuits on
various grounds. (The AES Defendants have until mid-February to respond to the December 2010 lawsuit.) In
September 2010, the Superior Court heard arguments on the motions. The Superior Court dismissed the
plaintiffs’ fraud allegations without prejudice to replead, and the plaintiffs filed amended complaints in
November 2010. The AES defendants have filed a renewed motion to dismiss the amended issues. The remaining
claims (other than fraud) addressed in the AES defendants’ original motion to dismiss are still pending. The AES
defendants believe they have meritorious defenses to the claims asserted against them and will defend themselves
vigorously; however, there can be no assurances that they will be successful in their efforts.
On December 21, 2010, AES-3C Maritza East 1 EOOD, which owns an unfinished 670MW lignite-fired
power plant in Bulgaria, made the first in a series of demands on the performance bond securing the construction
Contractor’s obligations under the parties’ EPC Contract. The Contractor failed to complete the plant on
schedule. The total amount demanded by Maritza under the performance bond is approximately €155 million
($205 million). However, the Contractor obtained a temporary injunction from a French court preventing the
issuing bank from honoring the bond demands. As the performance bond is governed by English law, Maritza
obtained a judgment from an English court that the bond should be paid, and then presented this judgment to the
French court which issued the temporary injunction. However, on February 10, 2011, the French court issued a
decision enjoining the issuing bank from honoring the demands on the performance bond pending the
determination of the arbitration between Maritza and the Contractor, described below. Maritza is attempting to
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lift that injunction or otherwise obtain payment on its demands. In addition, in December 2010, the Contractor
issued a notice of dispute alleging that the lignite that has been supplied by Maritza for commissioning of the
power plant is out of specification, allegedly entitling the Contractor to an extension of time to complete the
power plant, an increase to the contract price of approximately €62 million ($82 million), and other relief. The
Contractor thereafter advised Maritza that it had stopped commissioning of the power plant’s two units because
of the characteristics of the lignite supplied, and, in January 2011, initiated arbitration on its lignite
claim. Maritza disputes that the lignite is out of specification and intends to defend the arbitration and assert
counterclaims for delay liquidated damages and other relief relating to the Contractor’s failure to complete the
power plant and other breaches of the EPC contract. Maritza believes it has meritorious claims and defenses and
its efforts.
ITEM 4. REMOVED AND RESERVED
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PART II
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS

AND ISSUER PURCHASES OF EQUITY SECURITIES
Recent Sales of Unregistered Securities
On March 12, 2010, the Company and Terrific Investment Corporation (“Investor”), a wholly owned
subsidiary of China Investment Corporation, entered into a stockholder agreement (the “Stockholder
Agreement”) in connection with the agreement discussed in the following paragraph. Under the Stockholder
Agreement, as long as Investor holds more than 5% of the outstanding shares of common stock of the Company,
Investor will have the right to designate one nominee, who must be reasonably acceptable to the Board, for
election to the Board of Directors of the Company. Investor has not designated its nominee for election to the
Board of Directors of the Company. In addition, until such time as Investor holds 5% or less of the outstanding
shares of common stock, Investor has agreed to vote its shares in accordance with the recommendation of the
Company on any matters submitted to a vote of the stockholders of the Company relating to the election of
directors and compensation matters. Otherwise, Investor may vote its shares at its discretion. Further, under the
Stockholder Agreement, Investor will be subject to a standstill restriction which generally prohibits Investor from
purchasing additional securities of the Company beyond the level acquired by it under the stock purchase
agreement entered into between Investor and the Company on November 6, 2009. In addition, Investor has
agreed to a lock-up restriction such that Investor would not sell its shares for a period of 12 months following the
closing, subject to certain exceptions. The standstill and lock-up restrictions also terminate at such time as
Investor holds 5% or less of the outstanding shares of common stock. Investor will have certain registration
rights and preemptive rights under the Stockholder Agreement with respect to its shares of common stock of the
Company.
On March 15, 2010, the Company completed the sale of 125,468,788 shares of common stock to Investor.
The shares were sold for $12.60 per share, for an aggregate purchase price of $1.58 billion. Investor’s ownership
in the Company’s common stock is now approximately 15% of the Company’s total outstanding shares of
common stock on a fully diluted basis.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers

In July 2010, the Company’s Board of Directors approved a stock repurchase program under which the
Company may repurchase up to $500 million of AES common stock. The Board authorization permits the
Company to repurchase stock through a variety of methods, including open market repurchases and/or privately
negotiated transactions. The original authorization was set to expire on December 31, 2010, however; in
December 2010, the Board authorized an extension of the stock repurchase program. There can be no assurance
as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors.
The stock repurchase program may be modified, extended or terminated by the Board of Directors at any time.
During the year ended December 31, 2010, shares of common stock repurchased under this plan totaled
8,382,825 at a total cost of $99 million plus a nominal amount of commissions (average of $11.86 per share
including commissions). There was $401 million remaining under the stock repurchase program available for
future repurchases at December 31, 2010.
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The following table presents information regarding purchases made by The AES Corporation of its common
stock in the fourth quarter of 2010:
Total Number of Shares

Total Number Repurchased as Part Dollar Value of Maximum
of Shares Average Price of a Publicly Announced Number of Shares To Be
Repurchase Period Purchased Paid per Share Repurchase Plan Purchased Under the Plan
10/1/10—10/31/10 . . . . . . . . . . . . 6,086,345 $12.30 6,086,345 $409,713,649

11/1/10—11/30/10 . . . . . . . . . . . . — $ — — $409,713,649
12/1/10—12/31/10 . . . . . . . . . . . . 755,000 $11.89 755,000 $400,732,931
Total . . . . . . . . . . . . . . . . . . . . . . . 6,841,345 $12.26 6,841,345
Market Information
Our common stock is currently traded on the New York Stock Exchange (“NYSE”) under the symbol
“AES.” The closing price of our common stock as reported by the NYSE on February 23, 2011, was $12.25, per
share. The Company repurchased 8,382,825 and 10,691,267 shares of its common stock in 2010 and 2008,
respectively, and did not repurchase any of its common stock in 2009. The following tables set forth the high and
low sale prices, and performance trends for our common stock as reported by the NYSE for the periods indicated:
2010 2009
Price Range of Common Stock High Low High Low
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $14.24 $10.73 $ 9.48 $ 4.80

Second Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.46 8.94 11.64 5.62
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11.57 8.82 15.37 10.67
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.54 10.70 15.44 12.50
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Performance Graph
THE AES CORPORATION
PEER GROUP INDEX/STOCK PRICE PERFORMANCE
COMPARISON OF 5 YEAR CUMULATIVE TOTAL RETURNS

ASSUMES INITIAL INVESTMENT OF $100
160
139.23 143.58
140
120.53 135.12 120.22
120 114.29
121.95 102.69
115.61 97.44 111.88
100
100.00
77.37
80 84.08
76.94
60
52.05
40
20
0
2005 2006 2007 2008 2009 2010
AES S&P 500 S&P Utilities
Source: Bloomberg
We have selected the Standard and Poor’s (“S&P”) 500 Utilities Index as our peer group index. The S&P 500
Utilities Index is a published sector index comprising the 32 electric and gas utilities included in the S&P 500.
The five year total return chart assumes $100 invested on December 31, 2005 in AES Common Stock, the
S&P 500 Index and the S&P 500 Utilities Index. The information included under the heading “Performance
Graph” shall not be considered “filed” for purposes of Section 18 of the Securities Exchange Act of 1934 or
incorporated by reference in any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.
Holders
As of February 23, 2011, there were approximately 7,379 record holders of our common stock.
Dividends
We do not currently pay dividends on our common stock. We intend to retain our future earnings, if any, to
finance the future development and operation of our business. Accordingly, we do not anticipate paying any
dividends on our common stock in the foreseeable future.
Under the terms of our senior secured credit facility, which we entered into with a commercial bank
syndicate, we have limitations on our ability to pay cash dividends and/or repurchase stock. In addition, under the
terms of a guaranty we provided to the utility customer in connection with the AES Thames project, we are
precluded from paying cash dividends on our common stock if we do not meet certain net worth and liquidity
tests.
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Our project subsidiaries’ ability to declare and pay cash dividends to us is subject to certain limitations
contained in the project loans, governmental provisions and other agreements to which our project subsidiaries
are subject.
See the information contained under the caption “Securities Authorized for Issuance under Equity
Compensation Plans” of the Proxy Statement for the 2010 Annual Meeting of Shareholders of the Registrant,
which information is incorporated herein by reference.
ITEM 6. SELECTED FINANCIAL DATA

The following table sets forth our selected financial data as of the dates and for the periods indicated. You
should read this data together with Item 7.—Management’s Discussion and Analysis of Financial Condition and
Results of Operations and the Consolidated Financial Statements and the notes thereto included in Item 8 of this
Form 10-K. The selected financial data for each of the years in the five year period ended December 31, 2010
have been derived from our audited Consolidated Financial Statements. Our historical results are not necessarily
indicative of our future results.
Acquisitions, disposals, reclassifications and changes in accounting principles affect the comparability of
information included in the tables below. Please refer to the Notes to the Consolidated Financial Statements
included in Item 8.—Financial Statements and Supplementary Data of this Form 10-K for further explanation of
the effect of such activities. Please also refer to Item 1A.—Risk Factors of this Form 10-K and Note 24—Risks
and Uncertainties to the Consolidated Financial Statements included in Item 8 of this Form 10-K for certain risks
and uncertainties that may cause the data reflected herein not to be indicative of our future financial condition or
results of operations.
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SELECTED FINANCIAL DATA
Year Ended December 31,

Statement of Operations Data 2010 2009 2008 2007 2006
(in millions, except per share amounts)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,647 $13,954 $15,197 $12,835 $10,909
Income from continuing operations(1) . . . . . . . . . . . . . . 920 1,809 1,929 814 545
Income (loss) from continuing operations attributable
to The AES Corporation, net of tax . . . . . . . . . . . . . . (86) 710 1,170 428 123
Discontinued operations, net of tax . . . . . . . . . . . . . . . . 95 (52) 64 (523) 102
Extraordinary items, net of tax . . . . . . . . . . . . . . . . . . . — — — — 22
Net income (loss) attributable to The
AES Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $ 658 $ 1,234 $ (95) $ 247
Basic (loss) earnings per share:
to The AES Corporation, net of tax . . . . . . . . . . . . . . $ (0.11) $ 1.06 $ 1.75 $ 0.64 $ 0.19
Discontinued operations, net of tax . . . . . . . . . . . . . . . . 0.12 (0.07) 0.09 (0.78) 0.15
Extraordinary items, net of tax . . . . . . . . . . . . . . . . . . . — — — — 0.03
Basic earnings (loss) per share . . . . . . . . . . . . . . . . . . . $ 0.01 $ 0.99 $ 1.84 $ (0.14) $ 0.37
Diluted (loss) earnings per share:
to The AES Corporation, net of tax . . . . . . . . . . . . . . $ (0.11) $ 1.06 $ 1.73 $ 0.63 $ 0.19
Discontinued operations, net of tax . . . . . . . . . . . . . . . . 0.12 (0.08) $ 0.09 (0.77) 0.15
Extraordinary items, net of tax . . . . . . . . . . . . . . . . . . . — — — — 0.03
Diluted earnings (loss) per share . . . . . . . . . . . . . . . . . . $ 0.01 $ 0.98 $ 1.82 $ (0.14) $ 0.37
December 31,
Balance Sheet Data: 2010 2009 2008 2007 2006
(in millions)
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,511 $39,535 $34,806 $34,453 $31,274
Non-recourse debt (long-term) . . . . . . . . . . . . . . . . . . . $12,544 $12,304 $11,254 $10,621 $ 9,136
Non-recourse debt (long-term)—Discontinued
operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ 560 $ 615 $ 709 $ 1,046
Recourse debt (long-term) . . . . . . . . . . . . . . . . . . . . . . . $ 4,149 $ 5,301 $ 4,994 $ 5,332 $ 4,790
Cumulative preferred stock of a subsidiary . . . . . . . . . $ 60 $ 60 $ 60 $ 60 $ 60
Retained earnings (accumulated deficit) . . . . . . . . . . . . $ 620 $ 650 $ (8) $ (1,241) $ (1,093)
The AES Corporation stockholders’ equity . . . . . . . . . $ 6,473 $ 4,675 $ 3,669 $ 3,164 $ 2,979
(1) Includes pretax impairment expense of $1.2 billion, $147 million, $175 million and $408 million for the
years ended December 31, 2010, 2009, 2008 and 2007, respectively.
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ITEM 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Overview of Our Business
We are a global power company. We operate two primary lines of business. The first is our Generation
business, where we own and/or operate power plants to generate and sell power to wholesale customers such as
utilities, other intermediaries and certain end-users. The second is our Utilities business, where we own and/or
operate utilities to distribute, transmit and sell electricity to end-user customers in the residential, commercial,
industrial and governmental sectors within a defined service area. For the year ended December 31, 2010, our
Generation and Utilities businesses comprised approximately 45% and 55% of our consolidated revenue,
respectively.
We are also continuing to expand our wind and solar generation businesses. These initiatives are not
material contributors to our operating results at this time, but we believe that certain of these initiatives may
become material in the future. For additional information regarding our business, see Item 1.—Business of this
Form 10-K.
Our Organization and Segments. Our management reporting structure is organized along our two lines of
business (Generation and Utilities) and three regions: (1) Latin America & Africa; (2) North America; and
(3) Europe, Middle East & Asia (collectively “EMEA”), each managed by a regional president. The financial
reporting segment structure uses our management reporting structure as its foundation and reflects how we
manage the business internally. Based on our application of the segment reporting accounting guidance, which
provides certain quantitative thresholds and aggregation criteria, we have concluded that the Company has the
following six reportable segments:
We report the Company’s Europe Utilities, Africa Utilities, Africa Generation, Wind Generation and
Climate Solutions operating segments within “Corporate and Other” because they do not meet the criteria to
allow for aggregation with another operating segment or the quantitative thresholds that would require separate
disclosure under segment reporting accounting guidance. None of these operating segments are currently material
to our financial statement presentation of reportable segments, individually or in the aggregate. “Corporate and
Other” also includes corporate overhead costs which are not directly associated with the operations of our six
reportable segments and other intercompany charges such as self-insurance premiums which are fully eliminated
in consolidation.
During the second quarter of 2010, the Company modified its internal reporting structure to move the
management of the Company’s generation business in Jordan, Amman East, from Asia to Europe. Accordingly,
Amman East is now reported within the Europe—Generation segment. All prior periods have been
retrospectively restated to reflect this change and conform to current period presentation.
Key Drivers of Our Results of Operations. Our Generation and Utilities businesses are distinguished by the
nature of their customers, operational differences, cost structure, regulatory environment and risk exposure. As a
result, each line of business has slightly different drivers which affect operating results. Performance drivers for
our Generation businesses include, among other things, plant reliability and efficiency, power prices, volume,
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management of fixed and variable operating costs, management of working capital including collection of
receivables, and the extent to which our plants have hedged their exposure to currency and commodities such as
fuel. For our Generation businesses which sell power under short-term contracts or in the spot market, the most
crucial factors are the current market price of electricity and the marginal costs of production. Growth in our
Generation business is largely tied to securing new PPAs, expanding capacity in our existing facilities and
building or acquiring new power plants. Performance drivers for our Utilities businesses include, but are not
limited to, reliability of service; management of working capital, including collection of receivables; negotiation
of tariff adjustments; compliance with extensive regulatory requirements; and in developing countries, reduction
of commercial and technical losses. The operating results of our Utilities businesses are sensitive to changes in
economic growth and weather conditions in areas in which they operate. In addition to these drivers, as further
explained below, the Company also has exposure to currency exchange rate fluctuations.
One of the key factors which affect our Generation business is our ability to enter into contracts for the sale
of electricity and the purchase of fuel used to produce that electricity. Long-term contracts are intended to reduce
exposure to volatility associated with fuel prices in the market and the price of electricity by fixing the revenue
and costs for these businesses. The majority of the electricity produced by our Generation businesses is sold
under long-term contracts, or PPAs, to wholesale customers. In turn, most of these businesses enter into long-
term fuel supply contracts or fuel tolling arrangements where the customer assumes full responsibility for
purchasing and supplying the fuel to the power plant. While these long-term contractual agreements reduce
exposure to volatility in the market price for electricity and fuel, the predictability of operating results and cash
flows vary by business based on the extent to which a facility’s generation capacity and fuel requirements are
contracted and the negotiated terms of these agreements. Entering into these contracts exposes us to counterparty
credit risk. For further discussion of these risks, see “Supplier and/or customer concentration may expose the
Company to significant financial credit or performance risks” in Item 1A.—Risk Factors of this Form 10-K.
When fuel costs increase, many of our businesses are able to pass these costs on to their customers.
Generation businesses with long-term contracts in place do this by including fuel pass-through or fuel indexing
arrangements in their contracts. Utilities businesses can pass costs on to their customers through increases in
current or future tariff rates. Therefore, in a rising fuel cost environment, the increased fuel costs for these
businesses often result in an increase in revenue to the extent these costs can be passed through (though not
necessarily on a one-for-one basis). Conversely, in a declining fuel cost environment, the decreased fuel costs
can result in a decrease in revenue. Increases or decreases in revenue at these businesses that have the ability to
pass through costs to the customer have a corresponding impact on cost of sales, to the extent the costs can be
passed through, resulting in a limited impact on gross margin, if any. Although these circumstances may not have
a large impact on gross margin, they can significantly affect gross margin as a percentage of revenue. As a result,
gross margin as a percentage of revenue is a less relevant measure when evaluating our operating performance.
To the extent our businesses are unable to pass through fuel cost increases to their customers, gross margin may
be adversely affected.
Global diversification also helps us mitigate risk. Our presence in mature markets helps mitigate the
exposure associated with our businesses in emerging markets. Additionally, our portfolio employs a broad range
of fuels, including coal, gas, fuel oil, water (hydroelectric power), wind and solar, which reduces the risks
associated with dependence on any one fuel source. However, to the extent the mix of fuel sources enabling our
generation capabilities in any one market is not diversified, the spread in costs of different fuels or the
availability of natural resources such as water for hydroelectric power production or wind may also influence the
operating performance and the ability of our subsidiaries to compete within that market. For example, in a market
where gas prices fall to a low level compared to coal prices, power prices may be set by low gas prices which can
affect the profitability of our coal plants in that market. In certain cases, we may attempt to hedge fuel prices to
manage this risk, but there can be no assurance that these strategies will be effective.
We also attempt to limit risk by hedging much of our interest rate and commodity risk, and by matching the
currency of most of our subsidiary debt to the revenue of the underlying business. However, we only hedge a
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portion of our currency and commodity risks, and our businesses are still subject to these risks, as further
described in Item 1A.—Risk Factors of this Form 10-K, “We may not be adequately hedged against our exposure
to changes in commodity prices or interest rates.” Commodity and power price volatility could continue to
impact our financial metrics to the extent this volatility is not hedged. For a discussion of our sensitivities to
commodity, currency and interest rate risk, see Item 7A.—Quantitative and Qualitative Disclosures About
Market Risk in this Form 10-K.
Due to our global presence, the Company has significant exposure to foreign currency fluctuations. The
exposure is primarily associated with the impact of the translation of our foreign subsidiaries’ operating results
from their local currency to U.S. Dollars that is required for the preparation of our consolidated financial
statements. Additionally, there is foreign currency transaction exposure when an entity enters into transactions,
including debt agreements, in currencies other than their functional currency. These risks are further described in
Item 1A.—Risk Factors of this Form 10-K, “Our financial position and results of operations may fluctuate
significantly due to fluctuations in currency exchange rates experienced at our foreign operations.” During 2010,
changes in foreign currency exchange rates had a significant impact on our operating results. If the current
foreign currency exchange rate volatility continues, our gross margin and other financial metrics could continue
to be affected.
Another key driver of our results is our ability to bring new businesses into commercial operation
successfully. We currently have approximately 1,300 MW of projects under construction in eight countries. Our
prospects for improved operating results and cash flows are dependent upon successful completion of these
projects on time and within budget. However, as disclosed in Item 1A.—Risk Factors of this Form 10-K, “Our
business is subject to substantial development uncertainties,” construction is subject to a number of risks,
including risks associated with site identification, financing, permitting and our ability to meet construction
deadlines. Delays or the inability to complete projects and commence commercial operations can result in
increased costs, impairment of assets and other challenges involving partners and counterparties to our
construction agreements, PPAs and other agreements.
Our gross margin is also impacted by the fact that in each country in which we conduct business, we are
subject to extensive and complex governmental regulations, such as regulations governing the generation and
distribution of electricity, and environmental regulations which affect most aspects of our business. Regulations
differ on a country by country basis (and even at the state and local municipality levels) and are based upon the
type of business we operate in a particular country, and affect many aspects of our operations and development
projects. Our ability to negotiate tariffs, enter into long-term contracts, pass through costs related to capital
expenditures and otherwise navigate these regulations can have an impact on our revenue, costs and gross
margin. Environmental and land use regulations, including existing and proposed regulation of GHG emissions,
could substantially increase our capital expenditures or other compliance costs, which could in turn have a
material adverse affect on our business and results of operations. For a further discussion of the Regulatory
Environment, see Note 12—Contingencies and Commitments—Environmental, included in Item 8.—Financial
Statements, Item 1.—Business—Regulatory Matters—Environmental and Land Use Regulations and Item 1A.—
Risk Factors—Risks Associated with Government Regulation and Laws of this Form 10-K.
Key Drivers of Results in 2010

In 2010, the Company’s gross margin and cash flow from operations increased $531 million and $1.3
billion, respectively, while net income attributable to The AES Corporation decreased $649 million compared to
the prior year.
During 2010, our North American generation businesses continued to face challenges associated with
relatively lower gas prices and a decline in power prices relative to coal and other fuel. In particular, lower gas
and power prices have affected the generation volume and financial results of our coal-fired plants in New York
and our petroleum coke-fired plant in Texas which are merchant businesses and not subject to PPAs. We expect
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this trend to continue. In 2010, these challenges were partially mitigated by hedging arrangements. In North
America, current dark spreads and the corresponding forward curves do not present a long-term opportunity to
engage in hedging activity for 2011 and we have very limited hedges in place. As short-term opportunities occur
or should dark spreads improve, the Company may engage in additional hedging in 2011. As a result of these and
other challenges that arose from new regulatory concerns, we impaired $1.1 billion of assets and goodwill in
North America as described in Impairments below. In addition, AES Thames, our 208 MW coal-fired generation
business in Connecticut, filed for bankruptcy protection in January 2011.
Despite these challenges, many of our financial measures have improved when compared to 2009. Gross
margin increased due to the favorable impact of foreign currency translation caused by a weaker U.S. dollar
compared to most foreign currencies in 2010 and better operating performance at certain businesses. For
instance, certain of the Company’s Latin American businesses experienced continued increases in market
demand due to the local economic recovery in Latin America. The Company also benefited from higher demand
and favorable market conditions at Masinloc, our generation business in the Philippines. Masinloc’s higher
availability enabled the Company to benefit from increased contract and spot market sales and favorable market
prices in the Philippines. In addition, cash provided by operating activities increased due to the improved
operating results at Latin America generation businesses and Masinloc; contributions from the consolidation of
Cartagena and the Ballylumford acquisition in 2010; and changes in working capital in Latin America.
Despite the increase in gross margin in 2010, net income attributable to The AES Corporation decreased
primarily from the impact of long-lived asset impairments recognized related to four businesses: Eastern Energy
in New York, Southland in California, Tisza II in Hungary and Deepwater in Texas. These were partially offset
by gains from the sale of our discontinued businesses in Oman and Qatar and a decrease in goodwill impairment
charges.
In 2011, we expect to face continued challenges in our business, including the trends in North America
described above. In addition, the impact of fluctuating foreign exchange rates and commodity prices on our
operations may continue into 2011. In 2011, the components of the tariff reset in Brazil and its potential impact
on our Brazilian utilities are uncertain at this time and we expect continued challenges in our merchant
businesses such as those in the U.S., Hungary and Northern Ireland. However, management expects that
improved operating performance at certain businesses and growth from new businesses acquired, that
commenced operations in 2010 or are expected to commence operations in 2011, may lessen or offset the impact
of these challenges described above, as they did in 2010. However, if these favorable effects do not occur, or if
the challenges described above or elsewhere in this section impact us more than we currently anticipate, or if
volatile foreign currencies and commodities move unfavorably, then these adverse factors (or other adverse
factors unknown to us) may impact our gross margin and net income attributable to The AES Corporation. In
addition, we do not expect the trend of an increase in net cash provided by operating activities realized in 2010 to
continue in 2011. Such cash flows may be influenced by the operating challenges presented above and will also
not include the cash flows from operations which were sold in 2010 or the increases experienced from the cash
flows provided by the initial consolidation of Cartagena, the acquisition of Ballylumford and several working
capital transactions at our Latin American utilities in 2010 as discussed in Capital Resources and Liquidity.
The following briefly describes the key changes in our reported revenue, gross margin, net income
attributable to The AES Corporation, diluted earnings per share from continuing operations, Adjusted Earnings
per Share (a non-GAAP measure) and net cash provided by operating activities for the year ended December 31,
2010 compared to 2009 and 2008 and should be read in conjunction with our Consolidated Results of Operations
and Segment Analysis discussion within Management’s Discussion and Analysis of Financial Condition.
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Performance Highlights
2010 2009 2008
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,647 $13,954 $15,197
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,964 $ 3,433 $ 3,568
Net Income Attributable to The AES Corporation . . . . . . . . . . . . . $ 9 $ 658 $ 1,234
Diluted Earnings (Loss) per Share from Continuing Operations . . $ (0.11) $ 1.06 $ 1.73
Adjusted Earnings Per Share (a non-GAAP measure)(1) . . . . . . . . . $ 0.94 $ 1.06 $ 1.06
Net Cash Provided by Operating Activities . . . . . . . . . . . . . . . . . . $ 3,510 $ 2,202 $ 2,160
(1) See reconciliation and definition below under Non-GAAP Measure.
Year Ended December 31, 2010

Revenue increased $2.7 billion, or 19%, to $16.6 billion in 2010 compared with $14.0 billion in 2009. Key
drivers of the increase included:
• the favorable impact of foreign currency of $805 million;
• increased volume and rates at our Brazilian utilities attributable to increased demand due to the
recovery of the local economy and the favorable impact of the June 2009 tariff reset;
• the impact of the consolidation of Cartagena, in Spain, in accordance with the new consolidation
accounting guidance which became effective January 1, 2010;
• the favorable impact of rates at our generation businesses in Argentina;
• higher generation rates and volume at Masinloc in the Philippines;
• higher demand at Gener in Chile;
• the impact of the Company’s new business in Northern Ireland, acquired in August 2010; and
• higher demand and rates at Indianapolis Power and Light.
Gross margin increased $531 million, or 15%, to $4.0 billion in 2010 compared with $3.4 billion in 2009.
Key drivers of the increase included:
• the favorable impact of foreign currency of $219 million;
• an increase in demand at our generation and utilities businesses in Latin America;
• higher generation rates and volume at Masinloc in the Philippines; and
• the impact of the consolidation of Cartagena, in Spain, in accordance with the new consolidation
accounting guidance which became effective January 1, 2010.
These increases were partially offset by:

• an increase in fixed costs in Latin America, largely driven by bad debt recoveries and a reduction in
bad debt expense in Brazil in 2009 that did not recur; and
• lower rates at our generation businesses in New York.
Net income attributable to The AES Corporation decreased $649 million to $9 million in 2010, compared to
$658 million in 2009. Key drivers of the decrease included:
• Impairment losses in New York related to our Eastern Energy facilities, in California related to our
Southland (Huntington Beach) generation facility, in Hungary related to our Tisza II generation facility
and in Texas related to our Deepwater facility;
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• A decrease in gain on sale of investments due to the sale of our businesses in Northern Kazakhstan
which occurred in 2009; and
• A decrease in other income due to the reduction in interest and penalties in 2009 associated with
federal tax debts at Eletropaulo and Sul as a result of the Programa de Recuperacao Fiscal (“REFIS”)
program and a favorable court decision in 2009 enabling Eletropaulo to receive reimbursement of
excess non-income taxes paid from 1989 to 1992 in the form of tax credits to be applied against future
tax liabilities.
These decreases were partially offset by:

• The gain on sale of discontinued operations related to the sale of Barka which occurred in August
2010;
• An increase in net equity in earnings of affiliates partially offset by income tax expense related to the
sale of the Company’s indirect investment in Companhia Energética de Minas Gerais (“CEMIG”);
• Lower impairment expenses related to a goodwill impairment of our business in Kilroot that occurred
in 2009;
• Lower income tax expense due to 2010 asset impairments primarily recorded at certain U.S.
subsidiaries; and
• An increase in gross margin as described above.
Net cash provided by operating activities increased $1.3 billion, or 59%, to $3.5 billion in 2010 compared
with $2.2 billion in 2009. This net increase was primarily due to the following:
• an increase of $837 million at our Latin American Utilities businesses due to increased tax payments in
2009 associated with a tax amnesty program of $326 million, higher working capital requirements
during 2009 related to payments on the settlement of swap agreements of $65 million and in 2010, a
$50 million decrease in employer contributions to pension plans and lower payments for contingencies;
• an increase of $215 million at our Latin American Generation businesses due to the higher gross
margin in 2010 combined with improved working capital mainly as a result of higher collections of
value added taxes and accounts receivable;
• an increase of $99 million at Masinloc in the Philippines due to higher gross margin; and
• an increase of $58 million as a result of our consolidation of Cartagena in 2010 and the acquisition of
Ballylumford in Northern Ireland.

• a decrease of $136 million in operating cash flows from discontinued operations of businesses sold in
2010 compared to 2009. In 2010, net cash provided by operating activities of businesses sold was $33
million and will not recur in 2011.
In 2010 the increase in net cash provided by operating activities at our Latin American Utilities businesses
included several items such as the tax amnesty program and settlement of swap agreements, as described above,
that are not expected to recur. In addition, 2010 net cash provided by operating activities benefited from the one
time cash savings related to the utilization of tax credits received as a result of the REFIS program. As such, the
Company does not expect the trend of an increase in net cash provided by operating activities realized in 2010 to
continue in 2011.
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Revenue decreased $1.2 billion, or 8%, to $14.0 billion in 2009 compared with $15.2 billion in 2008. Key
drivers of the decrease included:
• the unfavorable impact of foreign currency of $997 million, largely driven by the Brazilian Real;
• decreases in volume at Uruguaiana due to the renegotiation of its power sales agreements in 2009 to
reduce the energy volume sold, as well as in New York and Hungary and lower dispatch in Northern
Ireland due to unfavorable gas prices compared to coal;
• the impact of lower spot and contract energy prices at our generation business in Chile; and
• lower energy prices and volume at our generation businesses in the Dominican Republic.

• an increase in tariff rates at our utilities businesses in Latin America primarily reflecting the recovery
of energy purchases that were passed through to our customers.
Gross margin decreased $135 million, or 4%, to $3.4 billion in 2009 compared with $3.6 billion in 2008.
Key drivers of the decrease included:
• the unfavorable impact of foreign currency of $218 million, largely driven by the Brazilian Real;
• lower energy prices and higher purchased energy costs at our generation businesses in the Dominican
Republic and Argentina;
• increased pension costs in Brazil and the U.S.; and
• lower volume in New York due to lower spot market rates.

• improved operating performance at our generation businesses in Chile and the Philippines;
• higher tariffs in Brazil and El Salvador; and
• bad debt recoveries and a reduction in bad debt expense in Brazil.
Net income attributable to The AES Corporation decreased $576 million to $658 million in 2009, compared
to $1.2 billion in 2008. Key drivers of the decrease included:
• a gain recognized in 2008 from the sale of two wholly-owned subsidiaries in Northern Kazakhstan
partially offset by a performance incentive bonus recognized in 2009 for management services
provided to these subsidiaries and a settlement upon termination of the management agreement in
2009;
• the reduction in gross margin in 2009 as described above; and
• higher impairment expenses in 2009 as a result of an impairment of goodwill at Kilroot in Northern
Ireland, and an impairment recognized on our assets in Pakistan which is reflected in discontinued
operations, offset by a decline in long-lived asset impairment compared to 2008.

• a reduction in foreign currency transaction losses on net monetary position as a result of reduced losses
at our businesses in Chile and the Philippines;
• a reduction in interest expense due primarily to lower interest rates and debt balances in Brazil and
favorable foreign currency translation; and
• lower income tax expenses driven in part by lower pre-tax income and a decrease in the effective tax
rate from 29% in 2008 to 26% in 2009 due, in part, to tax benefits recorded in 2009 upon the release of
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valuation allowances at U.S. and Brazilian subsidiaries, $165 million of non-taxable income recognized
in Brazil as a result of the REFIS program in 2009 and an increase in U.S. taxes on distributions from
the Company’s primary holding company in the second quarter of 2008.
In 2008, the $905 million gain recognized on the sale of our two Northern Kazakhstan businesses had a
significant impact on net income attributable to The AES Corporation. In 2009, the Company recognized a
performance incentive bonus of $80 million in the first quarter for management services provided to these sold
businesses, reflected as other income. Additionally, in the second quarter of 2009, the Company recognized an
additional gain on the sale of the businesses of $98.5 million upon the termination of the management agreement.
While the Company engages in the sale of assets and businesses from time to time, the gain or loss recognized in
any such sale will depend on a number of factors related to the asset or business that may be sold. Therefore, the
Company does not believe that the decline in net income between 2008 and 2009 represents a trend. All of the
amounts related to our two Northern Kazakhstan businesses were reported in continuing operations and will not
recur in 2010 or future years.
Net cash from operating activities increased $42 million, or 2%, to $2.2 billion in 2009 compared with
$2.2 billion in 2008. This net increase was primarily due to the following:
• an increase of $238 million at our Latin American Generation businesses due to improved working
capital management;
• an increase of $148 million at our Asia Generation businesses due to improved working capital
management and improved gross margin; and
• an increase of $115 million at our Europe Generation businesses primarily due to the collection of the
$80 million Kazakhstan management performance incentive bonus in the first quarter 2009.

• a decrease of $391 million at our Latin American Utilities businesses due to increased working capital
requirements, including the payment of the settlement of a swap agreement, increased tax payments
associated with a tax amnesty program and increased payments related to the settlement of
contingencies and energy purchases, partially offset by increased operating results; and
• a decrease of $77 million at our North America Generation businesses, primarily due to reduced
operating results.
Non-GAAP Measure
We define adjusted earnings per share (“Adjusted EPS”) as diluted earnings per share from continuing
operations excluding gains or losses of the consolidated entity due to (a) mark-to-market amounts related to
derivative transactions, (b) unrealized foreign currency gains or losses, (c) significant gains or losses due to
dispositions and acquisitions of business interests, (d) significant losses due to impairments, and (e) costs due to
the early retirement of debt. The GAAP measure most comparable to Adjusted EPS is diluted earnings per share
from continuing operations. AES believes that Adjusted EPS better reflects the underlying business performance
of the Company and is considered in the Company’s internal evaluation of financial performance. Factors in this
determination include the variability due to mark-to-market gains or losses related to derivative transactions,
currency gains or losses, losses due to impairments and strategic decisions to dispose or acquire business
interests or retire debt, which affect results in a given period or periods. Adjusted EPS should not be construed as
an alternative to diluted earnings per share from continuing operations, which is determined in accordance with
GAAP.
For the year ended December 31, 2010, the Company reported a loss from continuing operations of $0.11
per share. For purposes of measuring loss per share under GAAP, common stock equivalents were excluded from
weighted average shares as their inclusion would be antidilutive. However, for purposes of computing Adjusted
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EPS (a non-GAAP measure), the Company has included the impact of dilutive common stock equivalents as the
inclusion of the defined adjustments result in income for Adjusted EPS. The table below reconciles the weighted
average shares used in GAAP diluted earnings per share to the weighted average shares used in calculating the
non-GAAP measure of Adjusted EPS:

Reconciliation of Denominator used for Adjusted Earnings Per Share Loss Shares $ per Share
GAAP DILUTED EARNINGS PER SHARE
Loss from continuing operations attributable to The AES Corporation
common stockholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (86) 769 $(0.11)
EFFECT OF DILUTIVE SECURITIES
Stock options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 2 —
Restricted stock units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3 —
NON-GAAP DILUTED EARNINGS (LOSS) PER SHARE . . . . . . . . . . . . . . . . . . $ (86) 774 $(0.11)

Reconciliation of Adjusted Earnings Per Share 2010 2009 2008
Diluted earnings (loss) per share from continuing operations . . . . . . . . . . . . . . $(0.11) $ 1.06 $ 1.73
Derivative mark-to-market (gains) losses(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.01) 0.02 0.05
Currency transaction (gains) losses(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (0.04) (0.04) 0.17
Disposition/acquisition (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (3) (0.19)(4) (1.27)(5)
Impairment losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.07(6) 0.21(7) 0.13(8)
Debt retirement (gains) losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.03(9) — 0.25(10)
Adjusted earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.94 $ 1.06 $ 1.06
(1) Derivative mark-to-market (gains) losses were net of income tax per share of $0.00, $0.01 and $0.00 in
2010, 2009 and 2008, respectively.
(2) Unrealized foreign currency transaction (gains) losses were net of income tax per share of $0.00, $0.01 and
$0.00 in 2010, 2009 and 2008, respectively.
(3) The Company has not adjusted for the gain or the related tax effect from the sale of its indirect investment in
CEMIG, disclosed in Note 7—Investments in and Advances to Affiliates, in its determination of Adjusted
EPS because the gain was recognized by an equity method investee. The Company does not adjust for
transactions of its equity method investees in its determination of adjusted EPS.
(4) Amount includes: Kazakhstan gain of $98 million, or $0.15 per share, related to the termination of a
management agreement as well as a gain of $13 million, or $0.02 per share, related to the reversal of a
withholding tax contingency. In addition, there was a gain on sale associated with the shutdown of the Hefei
plant in China of $14 million, or $0.02 per share. There were no taxes associated with any of these
transactions.
(5) Amount includes: Net gain on Kazakhstan sale of $905 million, or $1.31 per share, and net loss on sale of
subsidiary interests in Gener of $31 million, or $0.04 per share. There was no income tax impact associated
with these transactions.
(6) Amount primarily includes asset impairments at Eastern Energy of $827 million, Southland (Huntington
Beach) of $200 million, Tisza of $85 million, and Deepwater of $79 million ($537 million, or $0.69 per
share, $130 million, or $0.17 per share, $69 million, or $0.09 per share, and $51 million, or $0.07 per share,
net of income tax, respectively) and goodwill impairment at Deepwater of $18 million (or $0.02 per share,
with no income tax impact).
(7) Amount includes: Goodwill impairments at Kilroot of $118 million, or $0.18 per share, and in the Ukraine
of $4 million, or $0.01 per share; write-off of development project costs in Latin America and Asia of $19
million ($11 million net of noncontrolling interests, or $0.01 per share) and an impairment of $10 million, or
$0.01 per share, of the Company’s investment in a company developing “blue gas” (coal to gas) technology.
There was no income tax impact associated with any of these transactions.
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(8) Amount includes: Impairment charges primarily associated with development projects in North America of
$75 million ($34 million net of noncontrolling interests and income tax, or $0.06 per share); Uruguaiana
asset write-down of $36 million ($17 million net of noncontrolling interest, or $0.02 per share); South
Africa peaker development cost write-off of $31 million ($28 million net of income tax, or $0.04 per share)
and a nontaxable impairment of the Company’s investment in “blue gas” (coal to gas) technology of $10
million, or $0.01 per share. Impairment losses are net of an income tax benefit of $0.02 per share in 2008.
(9) Amount includes loss on retirement of debt at the Parent Company of $15 million, at Andres of $10 million,
and at Itabo of $8 million ($10 million, or $0.01 per share, net of income tax at the Parent Company, $0.01
per share at Andres, and $4 million, or $0.01 per share, net of noncontrolling interest at Itabo).
(10) Amount includes: $55 million ($34 million net of income tax, or $0.05 per share) loss on the retirement of
Parent Company debt; $131 million, or $0.19 per share, which represented the tax impact on the repatriation
of a portion of the Kazakhstan sale proceeds that were used to fund the early retirement of Parent Company
debt; and $14 million ($9 million net of income tax, or $0.01 per share) of debt refinancing at IPALCO.
Debt retirement (gains) losses are net of an income tax benefit of $0.04 per share in 2008.
Management’s Priorities
Management continues to focus on the following priorities:
• Execution of our balanced capital allocation strategy including funds received in 2010 from asset and
equity sales:
• investing in value-accretive projects;
• delevering to increase financial flexibility, reduce risk and to create future borrowing capacity;
and
• executing its stock repurchase program; from July through December 2010 we have repurchased a
total of $99 million, or approximately 8.4 million shares of AES common stock, at an average
price per share of $11.86, including commissions.
• Improvement of operations in the existing portfolio;
• Achieve cost savings through the alignment of overhead costs with business requirements, systems
automation and optimal allocation of business development spending;
• Strategic portfolio management of existing projects including restructuring and potential sales of
certain North American generation subsidiaries;
• Completion of an approximately 1,300 MW active construction program on time and within budget;
• Achieving commercial operation at Maritza in Bulgaria. At the end of 2010, the Company experienced
certain commissioning delays, as further described in Key Trends and Uncertainties—Development
below; and
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• Integration of new projects. During 2010, the following projects were acquired or commenced
commercial operations:
Gross AES Equity Interest
Project Location Fuel MW (Percent, Rounded)
Ballylumford . . . . . . . . . . . . . . United Kingdom Gas 1,246 100%

JHRH(1) . . . . . . . . . . . . . . . . . . . China Hydro 379 35%
Nueva Ventanas . . . . . . . . . . . . Chile Coal 272 71%
St. Nikola . . . . . . . . . . . . . . . . . Bulgaria Wind 156 89%
Guacolda 4(2) . . . . . . . . . . . . . . . Chile Coal 152 35%
Dong Qi(3) . . . . . . . . . . . . . . . . . China Wind 49 49%
Huanghua II(3) . . . . . . . . . . . . . . China Wind 49 49%
St. Patrick . . . . . . . . . . . . . . . . France Wind 35 100%
North Rhins . . . . . . . . . . . . . . . Scotland Wind 22 100%
Kepezkaya . . . . . . . . . . . . . . . . Turkey Hydro 28 51%
Damlapinar(4) . . . . . . . . . . . . . . Turkey Hydro 16 51%
(1) Jianghe Rural Electrification Development Co. Ltd. (“JHRH”) and AES China Hydropower
Investment Co. Ltd. entered into an agreement to acquire a 49% interest in this joint venture in
June 2010. Acquisition of 35% ownership was completed in June 2010 and the transfer of the
remaining 14% ownership, which is subject to approval by the Chinese government, is expected to
be completed in May 2011.
(2) Guacolda is an equity method investment indirectly held by AES through Gener. The AES equity
interest reflects the 29% noncontrolling interests in Gener.
(3) Joint venture with Guohua Energy Investment Co. Ltd.
(4) Joint Venture with I.C. Energy.
Key Trends and Uncertainties

Our operations continue to face many risks as discussed in Item 1A.—Risk Factors of this Form 10-K. Some
of these challenges are also described above in Key Drivers of Results in 2010. We continue to monitor our
operations and address challenges as they arise.
Development. During the past year, the Company has successfully acquired and completed construction of a
number of projects, totaling approximately 2,404 MW, including the acquisition of Ballylumford in the United
Kingdom and completion of construction of a number of projects in Europe, Chile and China. However, as
discussed in Item 1A.—Risk Factors—Our business is subject to substantial development uncertainties of this
Form 10-K, our development projects are subject to uncertainties. Certain delays have occurred at the 670 MW
Maritza coal-fired project in Bulgaria, and the project has not yet begun commercial operations. As noted in Note
10—Debt included in Item 8 of this Form 10-K, as a result of these delays the project debt is in default and the
Company is working with its lenders to resolve the default. In addition, as noted in Item 3.—Legal Proceedings,
the Company is in litigation with the contractor regarding the cause of delays. At this time, we believe that
Maritza will commence commercial operations for at least some of the project’s capacity by the second half of
2011. However, commencement of commercial operations could be delayed beyond this time frame. There can
be no assurance that Maritza will achieve commercial operations, in whole or in part, by the second half of 2011,
resolve the default with the lenders or prevail in the litigation referenced above, which could result in the loss of
some or all of our investment or require additional funding for the project. Any of these events could have a
material adverse effect on the Company’s operating results or financial position.
Global Economic Conditions. During the past few years, economic conditions in some countries where our
subsidiaries conduct business have deteriorated. Although the economic conditions in several of these countries
have improved in recent months, our businesses could be impacted in the event these recent trends do not
continue.
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Our business or results of operations could be impacted if our subsidiaries are unable to access the capital
markets on favorable terms or at all, are unable to raise funds through the sale of assets or are otherwise unable to
finance or refinance their activities. The Company could also be adversely affected if capital market disruptions
result in increased borrowing costs (including with respect to interest payments on the Company’s or our
subsidiaries’ variable rate debt) or if commodity prices affect the profitability of our plants or their ability to
continue operations. Additionally, the Company could be adversely affected if general economic or political
conditions in the markets where our subsidiaries operate deteriorate, resulting in a reduction in cash flow from
operations, a reduction in the availability and/or an increase in the cost of capital, or if the value of our assets
remain depressed or decline further. Any of the foregoing events or a combination thereof could have a material
impact on the Company, its results of operations, liquidity, financial covenants, and/or its credit rating.
Our subsidiaries are subject to credit risk, which includes risk related to the ability of counterparties (such as
parties to our PPAs, fuel supply agreements, hedging agreements and other contractual arrangements) to deliver
contracted commodities or services at the contracted price or to satisfy their financial or other contractual
obligations. The Company has not suffered any material effects related to its counterparties during 2010.
However, if macroeconomic conditions impact our counterparties, they may be unable to meet their
commitments which could result in the loss of favorable contractual positions, which could have a material
impact on our business.
In addition, during the past year, certain European countries have faced a sovereign debt crisis and it is
possible that other nations could be affected. This crisis has resulted in an increased risk of default by
governments and the implementation of austerity measures in countries. If the crisis continues, worsens, or
spreads, there could be a material adverse impact on the Company. Our businesses may be impacted if they are
unable to access the capital markets, face increased taxes or labor costs, or if governments fail to fulfill their
obligations to us or adopt austerity measures which adversely impact our projects. In addition, as noted in the
Risk Factor entitled, “Our renewable energy projects and other initiatives face considerable uncertainties
including development, operational and regulatory challenges,” our renewables businesses are dependent on
favorable regulatory incentives, including subsidies, which are provided by sovereign governments. If these
subsidies or other incentives are reduced or repealed, or sovereign governments are unable or unwilling to fulfill
their commitments or maintain favorable regulatory incentives for renewables, in whole or in part, this could
impact the ability of the affected businesses to continue to grow their operations. For example, the Spanish
government recently issued a decree which limits the feed-in-tariff and number of photovoltaic hours eligible for
the tariff, which could adversely impact AES Solar in Spain. For further information on the decree see Item 1.—
Regulatory—Spain of this Form 10-K. In addition, any of the foregoing could also impact contractual
counterparties of our subsidiaries in core power or renewables. If such counterparties are adversely impacted,
then they may be unable to meet their commitments to our subsidiaries. For further information on the
importance of long-term contracts and our counterparty credit risk, see the Risk Factor from this Form 10-K
titled, “We may not be able to enter into long-term contracts, which reduce volatility in our results of
operations…”. As a result of any of the foregoing events, we may have to provide loans or equity to support
affected businesses or projects, restructure them, write down their value and/or face the possibility that these
projects cannot continue operations or provide returns consistent with our expectations, any of which could have
a material impact on the Company. The Company’s investment in AES Solar, whose primary operations are in
Europe, at December 31, 2010 was $312 million.
For a discussion of the risks associated with commodity prices, see “We may not be adequately hedged
against our exposure to changes in commodity prices or interest rates” in Item 1A.—Risk Factors of this
Form 10-K. It is also possible that commodity or power price volatility could continue to impact our financial
results. As noted in Key Drivers of Results in 2010, and Item 7A.—Quantitative and Qualitative Disclosures
About Market Risk—Commodity Price Risk of this Form 10-K, the Company’s North American businesses
continue to face pressure as a result of high coal prices relative to natural gas, which has affected the results of
certain of our coal plants in the region, particularly those which are merchant plants that are exposed to market
risk and those that have hybrid merchant risk, meaning those businesses that have a PPA in place, but purchase
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fuel at market prices or under short term contracts. If these conditions continue or worsen, these businesses may
need to restructure their obligations or seek additional funding (including from the Parent) or face the possibility
that they may be unable to meet their obligations and continue operations. Presently, Eastern Energy, Deepwater
and Thames are seeking to restructure their financial obligations and/or place certain of their plants in protective
layup status to mitigate operating risks caused by high fuel costs and other competitive pressures. There can be
no assurance the Company will be successful in these efforts.
The Company presently manages its commodity risk with hedging activities to mitigate earnings volatility.
However, at present in North America, dark spreads and the corresponding forward curves do not currently
present an opportunity to engage in additional hedging activity for 2011. As a result, there are hedging
arrangements in place for only a relatively small portion of 2011. As short-term opportunities occur or should
dark spreads improve, the Company may engage in additional hedging in 2011. Specifically, the operating results
of the Company’s Eastern Energy generation business in New York could be adversely impacted by continued
higher coal prices relative to electricity prices if hedging continues to be uneconomic.
If global economic conditions worsen, it could also affect the rates we receive for the electricity we generate
or transmit. Utility regulators or parties to our generation contracts may seek to lower our rates based on
prevailing market conditions as PPAs, concession agreements or other contracts come up for renewal or reset. In
addition, rising fuel and other costs coupled with contractual rate or tariff decreases could restrict our ability to
operate profitably in a given market. Each of these factors, as well as those discussed above, could result in a
decline in the value of our assets including those at the businesses we operate, our equity investments and
projects under development and could result in asset impairments that could be material to our operations. We
continue to monitor our projects and businesses.
Impairments.
Long-lived assets. The global economic conditions and other adverse factors discussed above heighten the
risk of a significant asset impairment. Examples of conditions that could be indicative of impairment which
would require us to evaluate the recovery of a long-lived asset or asset group include:
• current period operating or cash flow losses combined with a history of operating or cash flow losses or
a projection that demonstrates continuing losses associated with the use of a long-lived asset group;
• a significant adverse change in legal factors, including changes in environmental or other regulations or
in the business climate that could affect the value of a long-lived asset group, including an adverse
action or assessment by a regulator; and
• a significant adverse change in the extent or manner in which a long-lived asset group is being used or
in its physical condition.
As further described in Item 1.—Regulatory Matters—United Kingdom, the Northern Ireland Authority for
Utility Regulation (“NIAUR”) had the right to require the termination of the long-term PPAs under which
Kilroot, our generation business in the United Kingdom, supplies electricity to NIE Energy as early as 2010. One
of the conditions to the early termination was 180 days’ notice, which was provided to Kilroot on April 30,
2010. At March 31, 2010, management evaluated Kilroot’s long-lived assets for potential impairment assuming
the early termination of the PPA and concluded that no impairment existed at that time. On October 28, 2010,
Kilroot received final notice from NIAUR directing Kilroot and NIE Energy to terminate the PPA effective
November 1, 2010. Kilroot may not be able to replace the contract on competitive terms and, upon cancellation
of the PPA effective November 1, 2010, became a merchant plant. It will operate under the gross mandatory pool
of the SEM in Northern Ireland. There have been no additional impairment indicators since March 31, 2010.
AES Eastern Energy (“AEE”) operates four coal-fired power plants: Cayuga, Greenidge, Somerset and
Westover, representing generation capacity of 1,169 MW in the western New York power market. During 2010,
the power prices in the New York power market trended downward, similar to North America natural gas prices.
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The New York Independent System Operator (“NYISO”) continues to move forward with the potential addition
of a new capacity zone, which is expected to put further downward pressure on the capacity prices paid to the
AEE facilities. In November 2010, legislation was proposed in the state of New Jersey for the addition of state
subsidized capacity additions serving to lower PJM capacity price expectations. Similar changes to capacity
pricing may be made in the future in New York. Continued pressure on energy prices, driven by falling natural
gas prices and state actions, indicate that capacity prices are unlikely to reach levels significantly in excess of
those achieved historically. Accordingly, management’s view of long-term capacity markets in western New
York was revised downward. In December 2010, management revised its cash flow forecasts based on these
developments and forecasted continuing negative operating cash flow and losses through 2034. The forecasted
energy prices are such that a hedge strategy significantly beyond those in place at December 31, 2010 would not
be economical. Additionally, on November 15, 2010, Standard & Poor’s downgraded the bond rating of AEE
from BB to B+. Collectively, in the fourth quarter of 2010, these events were considered an impairment indicator
for the AES New York asset group, of which AEE is the most significant component and necessitated an
impairment evaluation of the asset group.
The long-lived asset group subject to the impairment evaluation was determined to include all of the
generating plants of AEE. This determination was based on the assessment of the plants’ inability to generate
independent cash flow. When the recoverability test of the asset group was performed, management concluded
that, on an undiscounted cash flow basis, the carrying amount of the asset group was not recoverable. To measure
the amount of impairment loss, management was required to determine the fair value of the asset group. To this
end, an independent valuation firm was engaged to assist management in its estimation of fair value. Cash flow
forecasts and the underlying assumptions for the valuation were developed by management. While there were
numerous assumptions that impact the fair value, potential state actions that impact capacity pricing and forward
energy prices were the most significant.
In determining the fair value of the asset group, the three valuation approaches prescribed by the fair value
measurement accounting guidance were considered. The fair value under the income approach was considered
the most appropriate and resulted in a zero fair value. Any salvage value of the asset group is expected to be
offset by environmental and other remediation costs. Accordingly, the long-lived asset group was considered
fully impaired and $827 million of impairment expense was recognized in the fourth quarter of 2010.
In March 2010, Deepwater, our 160 MW petroleum coke (“pet coke”)-fired merchant power plant located in
Texas, experienced deteriorating market conditions due to increasing pet coke prices and diminishing power
prices. As a result, Deepwater incurred an operating loss for the period and forecasted short term losses. These
conditions gradually worsened in the second quarter of 2010 and management determined it could not operate the
plant at certain times during the year without generating negative operating margin.
As the contraction of energy margin continued in the second quarter of 2010, management determined the
collective events to be an indicator of impairment and performed an impairment evaluation of Deepwater’s
goodwill and recoverability test for the long-lived asset group. Based on the results of these tests, in the second
quarter of 2010, management concluded no impairment was necessary. In the third quarter of 2010, these
downward trends continued and management, after determining that there was an indicator of impairment,
performed another impairment evaluation of Deepwater’s goodwill and a recoverability test of the long-lived
asset group. The results in the third quarter indicated no impairment was necessary for the asset group, but the
goodwill associated with the reporting unit was deemed to be impaired and the $18 million goodwill balance was
written-off during the quarter ended September 30, 2010.
In the fourth quarter of 2010, further adverse trends in energy and pet coke pricing curves were observed in
management’s review of external market analyses. The most significant impact on the forecasted energy prices
reviewed by management in November 2010 related to the general external market consensus that Federal CO2
cap and trade legislation was less likely, resulting in a drop in long-term energy price projections. At that time,
Deepwater’s revised forecasts indicated that Deepwater would have operating losses which would extend beyond
126
2020 and negative cash flows through 2019. Management concluded that, on an undiscounted cash flow basis,
the carrying amount of the asset group was no longer recoverable. To measure the amount of impairment loss,
management was required to determine the fair value of the asset group. To this end, an independent valuation
firm was engaged to assist management in its estimation of fair value. Cash flow forecasts and the underlying
assumptions for the valuation were developed by management. In determining the fair value of the asset group,
all three valuation approaches described by the fair value measurement accounting guidance were considered.
The fair value under the income approach was considered most appropriate. On that basis, the carrying value of
the asset group was determined to be impaired and $79 million of impairment expense was recognized in the
fourth quarter of 2010.
In May 2010, the California State Water Board approved a policy to reduce the number of marine animals
killed by seawater cooling systems in coastal power plants in California. At that time, since the policy required
the approval of California’s Office of Administrative Law, it was unclear whether the policy would be approved
and what form the regulations would take. In September 2010, the Office of Administrative Law in California
approved the policy that will require the Company to change the process through which it uses ocean water to
cool the generation turbines at its Alamitos, Huntington Beach and Redondo Beach (collectively “Southland”)
gas-fired generation facilities in California. The policy requires compliance with the new regulations by
December 31, 2020. The change in the water cooling process will result in significant future capital expenditures
to ensure compliance with the new regulations. This was considered as an impairment indicator for the long-lived
asset groups. The recoverability test of the long-lived asset groups indicated that the carrying amount of the
Huntington Beach asset group was not recoverable on an undiscounted cash flows basis. To assist management in
determining the fair value of the asset group, an independent valuation firm was engaged. Cash flow forecasts
and the underlying assumptions for the valuation were developed by management. The carrying amount of the
Huntington Beach asset group exceeded its fair value by $200 million which was recognized as an impairment
expense. The carrying amounts of the Alamitos and Redondo Beach long-lived asset groups were determined to
be recoverable on an undiscounted cash flows basis at September 30, 2010 and no impairment was necessary.
During the third quarter of 2010, we also recognized impairment on the long-lived assets at our Tisza II
generation plant in Hungary. Tisza II operates under an annual contract with an off-taker. In the third quarter of
2010, when Tisza II began the negotiation of its 2011 contract, future undiscounted cash flows of the plant were
no longer expected to recover the long-lived assets group’s carrying amount due to prevailing market rates,
higher generation costs and lower demand expectations. Accordingly, the Company measured the fair value of
the long-lived asset group and recorded an impairment expense of $85 million, representing the excess of
carrying amount over the fair value at September 30, 2010.
Goodwill. The Company seeks business acquisitions as one of its growth strategies. We have achieved
significant growth in the past as a result of several business acquisitions, which also resulted in the recognition of
goodwill. As noted in Item 1A.—Risk Factors of this Form 10-K, there is always a risk that “Our acquisitions
may not perform as expected.” The benefits of goodwill are typically realized through the future operating results
of an acquired business. Management believes that the recoverability of goodwill is positively correlated with the
economic environments in which our acquired businesses operate and a severe economic downturn could
negatively impact the recoverability of goodwill. Also, the evolving environmental regulations, including GHG
regulations, around the globe continue to increase the operating costs of our generation businesses. In extreme
situations, the environmental regulations could even make a once profitable business uneconomical. In addition,
most of our generation businesses have a finite life and as the acquired businesses reach the end of their finite
lives, the carrying amount of goodwill is gradually recovered through their periodic operating results. The
accounting guidance, however, prohibits the systematic amortization of goodwill and rather requires an annual
impairment evaluation. Thus, as some of our acquired businesses approach the end of their finite lives, they may
incur goodwill impairment charges even if there are no discrete adverse changes in the economic environment.
As noted in Long-lived assets above, adverse market conditions at Deepwater were also considered an
interim impairment indicator for its goodwill. Accordingly, in the second and third quarters of 2010, interim
127
goodwill impairment evaluations were performed at the Deepwater reporting unit level. The reporting unit passed
Step 1 of goodwill impairment evaluation in the second quarter and no impairment was recognized. In the third
quarter, however, the reporting unit failed Step 1 of goodwill impairment evaluation. Upon measurement of
impairment loss in Step 2, the entire $18 million goodwill balance was considered impaired and recognized as
goodwill impairment.
In the fourth quarter of 2010, the Company completed its annual goodwill impairment evaluation and did
not have any reporting units that were considered “at risk.” A reporting unit is considered “at risk” when its fair
value is not higher than its carrying amount by more than 10%. While there were no potential impairment
indicators that could result in the recognition of goodwill impairment for any of these reporting units, it is
possible we may incur goodwill impairment on these reporting units in future years if any of the following events
occur: a significant adverse change in business climate or legal factors, an adverse action or assessment by a
regulator, a sale of assets at less than carrying amount, unanticipated competition, a loss of key personnel, an
acquisition not performing as expected, changing environmental regulations that significantly increase the cost of
doing business, or a business reaches the end of its finite life. The likelihood of the occurrence of these events
may increase because of the challenging global macroeconomic conditions.
Regulatory— Environment. The Company faces certain risks and uncertainties related to numerous
environmental laws and regulations, including existing and potential GHG legislation or regulations, and actual
or potential laws and regulations pertaining to water discharges, waste management (including disposal of coal
combustion byproducts), and certain air emissions, such as SO2, NOx, particulate matter and mercury. For a
description of material regulations faced by the Company, see Item 1. —Business —Regulatory Matters. Such
risks and uncertainties could result in increased capital expenditures or other compliance costs which could have
a material adverse effect on certain of our United States or international subsidiaries and our consolidated results
of operations. For further information about these risks, see Item 1A.—Risk Factors, “Our businesses are subject
to stringent environmental laws and regulations”, “Our businesses are subject to enforcement initiatives from
environmental regulatory agencies” and “Regulators, politicians, non-governmental organizations and other
private parties have expressed concern about greenhouse gas, or GHG, emissions and the potential risks
associated with climate change and are taking actions which could have a material adverse impact on our
consolidated results of operations, financial condition and cash flows” set forth in this Form 10-K.
Recent Events
million authorized remained available under the stock repurchase program. For additional information, see
Note 14—Equity.
128
Consolidated Results of Operations
$ change $ change
Results of operations 2010 2009 2008 2010 vs. 2009 2009 vs. 2008
Revenue:
Latin America Generation . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,281 $ 3,651 $ 4,468 $ 630 $ (817)
Latin America Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,222 6,092 5,907 1,130 185
North America Generation . . . . . . . . . . . . . . . . . . . . . . . . 1,972 1,940 2,234 32 (294)
North America Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,145 1,068 1,079 77 (11)
Europe Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,362 820 1,143 542 (323)
Asia Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 618 375 345 243 30
Corporate and Other(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,066 870 1,012 196 (142)
Eliminations(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,019) (862) (991) (157) 129
Total Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,647 $13,954 $15,197 $ 2,693 $(1,243)
Gross Margin:
Latin America Generation . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,497 $ 1,357 $ 1,398 $ 140 $ (41)
Latin America Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,072 918 886 154 32
North America Generation . . . . . . . . . . . . . . . . . . . . . . . . 435 477 660 (42) (183)
North America Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 239 261 10 (22)
Europe Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 212 273 56 (61)
Asia Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240 93 (10) 147 103
Corporate and Other(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 186 117 62 69 55
Eliminations(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 20 38 (3) (18)
General and administrative expenses . . . . . . . . . . . . . . . . . . . . (392) (339) (368) (53) 29
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,526) (1,485) (1,770) (41) 285
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 348 519 63 (171)
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (239) (111) (161) (128) 50
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 465 375 (357) 90
Gain on sale of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 131 909 (131) (778)
Loss on sale of subsidiary stock . . . . . . . . . . . . . . . . . . . . . . . . — — (31) — 31
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21) (122) — 101 (122)
Asset impairment expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,221) (25) (175) (1,196) 150
Foreign currency transaction gains (losses) on net monetary
position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (33) 33 (184) (66) 217
Other non-operating expense . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (12) (15) 5 3
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (307) (599) (771) 292 172
Net equity in earnings of affiliates . . . . . . . . . . . . . . . . . . . . . . 183 92 33 91 59
Income from continuing operations . . . . . . . . . . . . . . . . . . . . . 920 1,809 1,929 (889) (120)
Income from operations of discontinued businesses . . . . . . . . . 75 96 97 (21) (1)
Gain (loss) from disposal of discontinued businesses . . . . . . . . 64 (150) 6 214 (156)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,059 1,755 2,032 (696) (277)
Noncontrolling interests:
Income from continuing operations attributable to
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,006) (1,099) (759) 93 (340)
(Income) loss from discontinuing operations attributable to
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (44) 2 (39) (46) 41
Net income attributable to The AES Corporation . . . . . . . . . . . $ 9 $ 658 $ 1,234 $ (649) $ (576)
Per Share Data:
Basic income per share from continuing operations . . . . . . . . . $ (0.11) $ 1.06 $ 1.75 $ (1.17) $ (0.69)
Diluted income per share from continuing operations . . . . . . . $ (0.11) $ 1.06 $ 1.73 $ (1.17) $ (0.67)
(1) Corporate and Other includes revenue from our generation and utilities businesses in Africa, utilities businesses in
Europe, Wind Generation and other renewables initiatives.
(2) Represents inter-segment eliminations of revenue related to transfers of electricity from Tietê (generation) to
Eletropaulo (utility).
(3) Corporate and Other gross margin includes gross margin from our generation and utilities businesses in Africa,
utilities businesses in Europe, Wind Generation and other renewables initiatives.
(4) Represents inter-segment eliminations of gross margin related to corporate charges for self insurance premiums.
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Segment Analysis
Latin America—Generation
The following table summarizes revenue and gross margin for our Generation segment in Latin America for
the periods indicated:
For the Years Ended December 31,
% Change % Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
($’s in millions)
Latin America Generation
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,281 $3,651 $4,468 17% -18%
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,497 $1,357 $1,398 10% -3%
Fiscal Year 2010 versus 2009

Excluding the favorable impact of foreign currency translation and remeasurement of $133 million,
generation revenue for 2010 increased $497 million, or 14%, from 2009 primarily due to:
• higher spot prices of $221 million associated with increased fuel prices in Argentina;
• higher volume of $139 million at Gener in Chile due to higher demand;
• higher volume and ancillary services of $115 million, and higher contract prices from PPAs indexed to
gas and higher spot prices of $27 million in the Dominican Republic;
• higher contract prices of $58 million in Colombia and Tietê in Brazil;
• the positive impact of $28 million resulting from the final settlement of the power sales agreement
between Sul and Uruguaiana, our businesses in Brazil; and
• higher volume of $21 million in Panama due to higher water inflows into the system.

• lower volume sold at Uruguaiana of $53 million as a result of renegotiation of its power sales
agreements;
• lower volume due to unfavorable hydrology in Colombia and Argentina of $41 million;
• lower contract prices at Gener of $32 million; and
• lower contract prices on PPAs indexed to international coal prices in the Dominican Republic of $22
million.
Excluding the favorable impact of foreign currency translation and remeasurement of $106 million,
generation gross margin for 2010 increased $34 million, or 3%, from 2009 primarily due to:
• higher spot prices in Argentina of $69 million;
• higher volume and ancillary services in the Dominican Republic of $55 million;
• higher contract prices of $33 million in Colombia;
• the positive impact of $28 million resulting from the final settlement of the power sales agreement
between Sul and Uruguaiana, as mentioned above; and
• higher volume of $23 million in Panama.

• higher fuel and purchased energy prices at Gener of $48 million;
• the net effect of lower PPA prices and higher fuel costs in the Dominican Republic of $38 million;
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• the impact of a reversal of bad debt expense during the first quarter of 2009 of $36 million at
Uruguaiana as a result of the renegotiation of one of its power sales agreements; and
• higher fixed costs of $30 million at Gener primarily due to higher employee costs, increased
maintenance expenses and costs incurred due to construction delays at Campiche.
For the year ended December 31, 2010, revenue increased 17% while gross margin increased 10%,
primarily due to higher spot purchases and fuel prices at Gener and the reversal of bad debt expense as a result of
the renegotiation of one of the power sales agreements at Uruguaiana in the first quarter of 2009.

Excluding the unfavorable impact of foreign currency translation and remeasurement of $181 million,
driven by Brazil and Argentina, generation revenue for 2009 decreased $636 million, or 14%, from 2008
primarily due to:
• lower spot and contract prices of $295 million at Gener;
• lower volume of $227 million at Uruguaiana as a result of the renegotiation of its power sales
agreements in 2009 to reduce the energy volume sold; and
• lower energy prices and volume of $174 million in the Dominican Republic.

• and increase of $100 million due to fewer outages at Gener and in Argentina in 2009; and
• higher prices of energy sold of $66 million at Tietê.
Excluding the unfavorable impact of foreign currency translation and remeasurement of $94 million, driven
by Brazil and Argentina, generation gross margin for 2009 increased $53 million, or 4%, from 2008 primarily
due to:
• higher prices of energy sold of $66 million at Tietê;
• fewer outages of $60 million at Gener and in Argentina;
• lower diesel consumption, partially offset by higher energy purchases and higher gas consumption, at
Gener of $47 million;
• lower volume of energy purchased at Uruguaiana of $44 million as a result of the renegotiated power
sales agreements; and
• the favorable impact of $28 million of a decrease in bad debt expense at Uruguaiana as a result of the
renegotiated power sales agreements.

• the unfavorable impact of lower energy prices of $75 million in the Dominican Republic;
• lower volume and energy prices of $66 million in Argentina;
• higher purchased energy prices of $48 million at Uruguaiana; and
• lower spot sales of $48 million at Panama.
For the year ended December 31, 2009, revenue decreased by 18% while gross margin decreased 3%,
primarily due to reduced energy purchases, fewer outages and lower bad debt expense.
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Latin America—Utilities
The following table summarizes revenue and gross margin for our Utilities segment in Latin America for the
periods indicated:
% Change % Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
($’s in millions)
Latin America Utilities
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $7,222 $6,092 $5,907 19% 3%
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,072 $ 918 $ 886 17% 4%

Excluding the favorable impact of foreign currency translation of $697 million, primarily in Brazil, utilities
revenue for 2010 increased $433 million, or 7%, from 2009 primarily due to:
• increased volume of $316 million, primarily in Brazil, due to increased market demand; and
• higher tariffs of $114 million primarily related to the July 2009 tariff reset in Brazil partially offset by
the unfavorable impact on rates at Eletropaulo in Brazil of a cumulative adjustment to regulatory
liabilities and higher energy prices across our Latin America utility businesses associated with energy
purchases passed through to customers of $97 million.
Excluding the favorable impact of foreign currency translation of $107 million, primarily in Brazil, utilities
gross margin for 2010 increased $47 million, or 5%, from 2009 primarily due to:
• increased volume of $163 million, primarily in Brazil, due to the increased market demand; and
• lower contingencies of $142 million in Eletropaulo primarily related to labor contingencies which
included a one-time reversal, reflecting an agreement with Fundação CESP, the pension plan
administrator, of $51 million associated with claims for past benefit obligations which will now be
accounted for as a component of the pension plan.

• higher fixed costs of $238 million primarily due to the recovery in 2009 of a municipality receivable
previously written off in Brazil and higher salaries and other employee related costs, provisions for
commercial losses, regulatory penalties and maintenance costs; and
• $28 million related to the final settlement of the power sales agreement between Sul and Uruguaiana.

Excluding the unfavorable impact of foreign currency translation of $442 million, primarily in Brazil,
utilities revenue for 2009 increased $627 million, or 11%, from 2008 primarily due to:
• higher tariffs of $560 million reflecting the recovery of energy purchases of $453 million that were
passed through to customers at our utilities in Brazil and El Salvador; and
• higher volume in Brazil of $62 million.
Excluding the unfavorable impact of foreign currency translation of $62 million, primarily in Brazil, utilities
gross margin for 2009 increased $94 million, or 11%, from 2008 primarily due to:
• higher tariffs of $107 million in El Salvador and Brazil;
• a $64 million recovery of a municipality receivable previously written off;
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• a non-recurring PIS/COFINS fine in 2008 of $33 million; and
• higher volume of $32 million across the region.

• the unfavorable impact of higher fixed costs of $120 million mainly related to pension expense, labor
contingencies and maintenance costs in Brazil.
North America—Generation
The following table summarizes revenue and gross margin for our Generation segment in North America for
% Change % Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
($’s in millions)
North America Generation
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,972 $1,940 $2,234 2% -13%
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 435 $ 477 $ 660 -9% -28%

Excluding the favorable impact of foreign currency translation of $19 million, generation revenue for 2010
increased $13 million, or 1%, from 2009 primarily due to:
• increased rates, volume and an availability bonus at TEG/TEP in Mexico of $41 million;
• higher volume, primarily due to fewer outages and higher rates, of $22 million at Merida in Mexico;
• higher volume of $19 million at Warrior Run in Maryland due to fewer outages; and
• an increase of $13 million in New York due to the favorable impact of mark-to-market derivative
adjustments.

• a net decrease of $50 million in New York due to lower rates partially offset by higher volume of
electricity sold due to fewer outages;
• a net decrease of $18 million at Deepwater in Texas primarily due to lower volume; and
• a net decrease of $14 million in Puerto Rico primarily due to a penalty from a forced outage.
Excluding the favorable impact of foreign currency translation of $3 million, generation gross margin for
2010 decreased $45 million, or 9%, from 2009 primarily due to:
• a net decrease of $94 million in New York due to lower rates and higher coal prices partially offset by
higher volume of electricity sold due to fewer outages;
• a decrease of $16 million at Deepwater due to lower volume and rates;
• a net decrease of $11 million in Puerto Rico primarily due to a penalty from a forced outage;
• a decrease of $9 million in Hawaii due to an unfavorable impact of mark-to-market derivatives; and
• a decrease of $7 million in Puerto Rico due to higher fixed costs.

• an increase of $39 million in New York primarily due to lower fixed costs as a result of lower contract
and maintenance costs, and other employee related costs;
133
• a net increase of $26 million at TEG/TEP due to a current year availability bonus and fewer outages
partially offset by higher fuel prices;
• higher volume of $14 million at Warrior Run due to fewer outages; and
• an increase of $13 million in New York due to the favorable impact of mark-to-market derivative
adjustments.
For the year ended December 31, 2010, revenue increased by 2% while gross margin decreased 9%,
primarily due to the change in rates in New York having a greater impact on gross margin than revenue.

Excluding the unfavorable impact of foreign currency translation of $44 million, primarily in Mexico,
generation revenue for 2009 decreased $250 million, or 11%, from 2008 primarily due to:
• a net decrease of $107 million in New York due to a reduction in the volume of electricity sold in the
spot market as a result of lower spot rates, partially offset by a rate increase on electricity sold under
favorable contracts;
• a decrease of $80 million due to a reduction in natural gas prices at Merida;
• increased outages of $22 million, $21 million and $17 million at Warrior Run, TEG/TEP and
New York, respectively;
• lower rates of $20 million at Deepwater;
• the unfavorable impact of commodity derivatives in New York of $11 million; and
• the unfavorable impact in 2009 of derivative amortization at Warrior Run of $9 million.

• a $15 million revenue adjustment at Merida in 2008.
Excluding the unfavorable impact of foreign currency translation of $9 million, generation gross margin for
2009 decreased $174 million, or 26%, from 2008 primarily due to:
• a net decrease of $72 million in New York driven by a reduction in the volume of electricity sold in the
spot market as a result of lower spot rates, partially offset by a rate increase on electricity sold under
favorable contracts;
• a $29 million unfavorable impact of mark-to-market derivative adjustments on coal supply contracts in
Hawaii as a result of a gain of $22 million in 2008 compared to a loss of $7 million in 2009;
• an increase in outages of $22 million and $6 million at Warrior Run and in New York, respectively;
• the unfavorable impact of commodity derivatives of $11 million and higher emission allowance
purchases of $13 million in New York; and
• the unfavorable impact of $9 million in 2009 of derivative amortization at Warrior Run.

• a $15 million revenue adjustment at Merida in 2008.
primarily due to the increase in coal prices in New York and the unfavorable impact of derivatives in 2009 in
Hawaii that had no corresponding impact on revenue.
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North America—Utilities
The following table summarizes revenue and gross margin for our Utilities segment in North America for

% Change % Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
($’s in millions)
North America Utilities
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,145 $1,068 $1,079 7% -1%
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 249 $ 239 $ 261 4% -8%

Utilities revenue for 2010 increased $77 million, or 7%, from 2009 primarily due to:
• higher retail demand of $64 million as a result of warmer weather and higher fuel adjustment charges;
and
• increased wholesale revenue of $11 million primarily due to higher prices.
Utilities gross margin for 2010 increased $10 million, or 4%, from 2009 primarily due to:
• higher retail margin of $20 million due to increased demand;
• lower pension expense of $12 million; and
• lower emission allowance expense of $5 million.

• increased maintenance expenses of $16 million due to the timing of major generating unit overhauls;
and
• increased fixed costs of $14 million.
For the year ended December 31, 2010, revenue increased by 7% while gross margin increased 4%,
primarily due to increased fuel and maintenance costs.

Utilities revenue for 2009 decreased $11 million, or 1%, from 2008 primarily due to:
• lower retail volume of $31 million due primarily to milder weather and the economic recession; and
• decreased wholesale revenue of $7 million driven by lower market prices.

• $32 million of voluntary credits IPL provided to retail customers in 2008. See Item 1.—Business—
Regulatory Matters—North America of this Form 10-K for further information regarding these credits.
Utilities gross margin for 2009 decreased $22 million, or 8%, from 2008 primarily due to:
• decreased wholesale margin of $16 million due to unfavorable prices; and
• increased pension expense of $25 million largely due to the decline in market value of IPL’s pension
assets during 2008.
135
• increased retail margin of $15 million, primarily due to the $32 million of voluntary customer credits
IPL issued to its retail customers in 2008, partially offset by lower retail sales volumes in 2009; and
• decreased property tax expense of $5 million.
primarily due to the $25 million increase in pension expense and the $32 million of voluntary customer credits
IPL issued to its retail customers in 2008, both of which had an unfavorable impact on gross margin.
Europe—Generation
The following table summarizes revenue and gross margin for our Generation segment in Europe for the
periods indicated:

% Change % Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
($’s in millions)
Europe Generation
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,362 $820 $1,143 66% -28%
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 268 $212 $ 273 26% -22%

Excluding the unfavorable impact of foreign currency translation of $41 million, generation revenue for
2010 increased $583 million, or 71%, from 2009 primarily due to:
• $409 million from the adoption of new accounting guidance on the consolidation of variable interest
entities (“VIEs”) which resulted in the consolidation of Cartagena in Spain, a generation business
previously accounted for under the equity method of accounting;
• $117 million from the operations of Ballylumford in the United Kingdom, which was acquired in
August 2010;
• $16 million from a full year of combined cycle operations at our Amman East plant in Jordan, which
was single cycle until August 2009;
• higher tariffs of $16 million at Altai in Kazakhstan;
• higher volume of $15 million at Kilroot in the United Kingdom largely driven by coal pass-through and
increased demand, partially offset by lower capacity revenue due to the termination of the long term
PPA and related supplementary agreements.

• lower volume and sales of emissions allowances in Hungary of $16 million.
Excluding the unfavorable impact of foreign currency translation of $1 million, generation gross margin for
2010 increased $57 million, or 27%, from 2009 primarily due to:
• $62 million from the consolidation of Cartagena as discussed above;
• higher tariffs and lower fixed costs at Altai of $29 million; and
• $13 million from the operations of Ballylumford since its acquisition.
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• lower gross margin of $28 million primarily from the termination of the long-term PPA at Kilroot; and
• lower gross margin of $20 million in Hungary primarily attributable to higher fuel costs that could not
be passed through and lower sales of emission allowances.
primarily due to the consolidation of Cartagena and acquisition of Ballylumford that have a larger positive
impact on revenue than gross margin, and the positive impact of higher energy revenue at Kilroot, which as a
pass-through had no corresponding impact on gross margin.

Excluding the unfavorable impact of foreign currency translation of $146 million, driven mainly by Kilroot,
Hungary and Kazakhstan, generation revenue for 2009 decreased $177 million, or 15%, from 2008 primarily due
to:
• lower revenue of $101 million as a result of the sale of Ekibastuz and Maikuben in May 2008;
• lower volume of $81 million in Hungary due to the combined impact of the cancellation of one of our
PPAs and reduced demand; and
• lower volume of $67 million at Kilroot, a coal-fired plant, mainly driven by lower dispatch due to
favorable gas prices compared to coal.

• the benefit of new business of $50 million at Amman East, which commenced single cycle operations
in July 2008; and
• higher rates of $15 million in Kazakhstan.
Excluding the unfavorable impact of foreign currency translation of $35 million, driven mainly by Kilroot
and Kazakhstan, generation gross margin for 2009 decreased $26 million, or 10%, from 2008 primarily due to:
• lower gross margin of $41 million as a result of the sale of Ekibastuz and Maikuben in May 2008;
• lower demand of $12 million in Hungary; and
• an overall increase of $22 million in fixed costs across the region.

• higher capacity revenue at Kilroot;
• higher energy prices in Kazakhstan; and
• the benefit of new business at Amman East.
Asia—Generation
The following table summarizes revenue and gross margin for our Generation segment in Asia for the
periods indicated:
% Change % Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
($’s in millions)
Asia Generation
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $618 $375 $345 65% 9%
Gross Margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $240 $ 93 $ (10) 158% 1030%
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Excluding the favorable impact of foreign currency translation of $28 million, generation revenue for 2010
increased $215 million, or 57%, from 2009 primarily due to:
• favorable generation rates and volume of $210 million at Masinloc in the Philippines as a result of
increased market demand and improved plant availability subsequent to the completion of its overhaul
at the beginning of 2010; and
• higher demand from both new and existing contract and spot customers as a result of lower supply
shortages in the Philippines power market due to a strong energy growth rate.
Excluding the favorable impact of foreign currency translation of $13 million, generation gross margin for
2010 increased $134 million, or 144%, from 2009 primarily due to a combination of higher availability
attributable to improved plant operations, higher market demand and favorable spot prices at Masinloc.
primarily due to the positive influence on gross margin due to favorable spot rates and operational efficiencies
resulting from the Masinloc plant overhauls in late 2009 and early 2010, which led to higher availability and
allowed for more efficient operations that have materially improved the operating results for 2010 as compared to
2009.

Excluding the unfavorable impact of foreign currency translation of $23 million, primarily in the Philippines
and Sri Lanka, generation revenue for 2009 increased $53 million, or 15%, from 2008 primarily due to:
• the benefit of $46 million of our new business Masinloc, which was acquired in April 2008;
• increased revenue of $70 million in 2009 at Masinloc due to improved rates and volume as a result of
improved availability and new customer contracts; and
• $18 million from a one-time favorable energy sales settlement at Masinloc.

• the decrease in revenue of $71 million at Kelanitissa in Sri Lanka primarily due to a decline in fuel
costs which are largely passed through to the customer and higher outages in 2009 as compared to 2008
partially offset by higher capacity revenue.
Excluding the unfavorable impact of foreign currency translation of $6 million, primarily in the Philippines,
generation gross margin for 2009 increased $109 million, or 1,090%, from 2008 primarily due to:
• the impact of our new business at Masinloc of $23 million;
• a $91 million increase at Masinloc due to higher contract sales, where margins are more favorable than
spot sales, lower fuel prices, improved availability and the favorable energy sales settlement described
above; and
• higher capacity revenue at Kelanitissa of $10 million.

• higher fixed costs of $20 million at Masinloc.
For the year ended December 31, 2009, revenue increased 9% while gross margin increased 1,030%,
primarily due to higher contract margins at Masinloc as a result of improved operations, availability and lower
fuel prices, as well as the larger relative impact on gross margin from the one-time favorable energy sales
settlement described above.
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Corporate and Other
Corporate and other includes the net operating results from our generation and utilities businesses in Africa,
utilities businesses in Europe, AES Wind Generation and renewables projects which are immaterial for the
purposes of separate segment disclosure. The following table excludes inter-segment activity and summarizes
revenue and gross margin for Corporate and Other entities for the periods indicated:

% Change % Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
($’s in millions)
Revenue
Europe Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 356 $286 $ 403 24% -29%
Africa Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 370 379 14% -2%
Africa Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 65 65 -6% 0%
Wind Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 133 128 52% 4%
Corp/Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 16 37 56% -57%
Total Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . $1,066 $870 $1,012 23% -14%
Gross Margin
Europe Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 21 $ 16 $ 34 31% -53%
Africa Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 71 30 -8% 137%
Africa Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 41 28 32% 46%
Wind Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 11 19 300% -42%
Corp/Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 (22) (49) -109% -55%
Total Corporate and Other . . . . . . . . . . . . . . . . . . . . . . . . . . $ 186 $117 $ 62 59% 89%

Excluding the unfavorable impact of foreign currency translation of $30 million, primarily in Cameroon,
Corporate and Other revenue increased $226 million for 2010, or 26% from 2009. The increase was primarily
due to:
• higher volume at our utility businesses in Ukraine driven by an overall increase in market demand;
• higher volume and utility tariffs at Sonel in Cameroon driven by an increase in market demand; and
• incremental revenue from new wind generation projects that commenced operations during the year
and an overall volume increase across our wind businesses.
Excluding the unfavorable impact of foreign currency translation of $8 million, primarily in Cameroon,
Corporate and Other gross margin increased $77 million for 2010, or 66% from 2009. The increase was primarily
due to:
• an increase in gross margin from our new wind generation projects and higher volume, as discussed
above; and
• an increase in volume at Dibamba, our generation business, in Cameroon.

• an increase in fixed costs at Sonel.
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Excluding the unfavorable impact of foreign currency translation of $162 million, primarily in Ukraine,
Corporate and Other revenue increased $20 million for 2009, or 2%, from 2008. The increase was primarily due
to:
• higher tariffs in Ukraine of $27 million.
Excluding the unfavorable impact of foreign currency translation of $12 million, primarily in Ukraine,
Corporate and Other gross margin increased $67 million for 2009, or 108%, from 2008. The increase was
primarily due to:
• a decrease in fixed costs across the Africa region.
The increase was partially offset by:

• higher fuel consumption attributable to lower hydrology at Sonel.
General and Administrative Expense

General and administrative expense includes those expenses related to corporate and region staff functions
and/or initiatives, executive management, finance, legal, human resources, information systems, and
development costs.
General and administrative expenses increased $53 million, or 16%, to $392 million in 2010 from 2009. The
increase is primarily related to business development costs associated with increased development efforts,
primarily in Europe, Turkey and India.
General and administrative expenses decreased $29 million, or 8%, to $339 million in 2009 from 2008. The
decrease is primarily related to 2008 professional fees associated with remediation efforts and a reduction in
business development costs. The favorable variance is partially offset by an increase in costs associated with the
worldwide implementation of SAP.
Interest expense
Interest expense increased $41 million, or 3%, to $1.5 billion in 2010 from 2009. This increase was
primarily due to interest expense at Cartagena which is now a consolidated entity, higher interest rates at Tietê,
increased debt principal at Eletropaulo and interest being expensed related to St. Nikola, our wind project in
Bulgaria, due to commencement of operations in 2010. These increases were partially offset by reduced debt
principal at the Parent Company.
Interest expense decreased $285 million, or 16%, to $1.5 billion in 2009 from 2008. This decrease was
primarily due to lower interest rates globally due to economic conditions and inflationary adjustments to the
market price index in Brazil. In addition, interest expense decreased as a result of favorable foreign currency
translation, mainly in Brazil and lower interest expenses associated with decreased debt balances at Eletropaulo.
These decreases were partially offset by higher interest expense at Masinloc in the Philippines which was
acquired in April 2008, and interest expense at Infovias in Brazil where a fee on a non-exercised credit line was
written off.
Interest income
Interest income increased $63 million, or 18%, to $411 million in 2010 from 2009. This increase was
primarily due to a higher average balance in short term investments at Eletropaulo and the favorable impact of
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foreign currency translation in Brazil as well as the settlement of a dispute related to inflation adjustments for
energy sales at Tietê. These increases were partially offset by reduced interest income from a loan to a wind
development project in Brazil which was repaid in June 2010.
Interest income decreased $171 million, or 33%, to $348 million in 2009 from 2008. This decrease was
primarily due to lower interest rates and lower investment balances in Brazil, unfavorable foreign currency
translation in Brazil, the impact of decreased interest rates and inflationary adjustments on accounts receivable in
2008 at Gener in Chile and a decreased cash balance at the Parent Company.
Other income
Years Ended December 31,

2010 2009 2008
(in millions)
Gain on extinguishment of tax and other liabilities . . . . . . . . . . . . $ 65 $168 $199
Tax credit settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 129 —
Performance incentive fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 80 —
Insurance proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 40
Gain on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 14 34
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 74 102
Total other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $108 $465 $375
Other income of $108 million for the year ended December 31, 2010 was primarily related to the
extinguishment of a swap liability owed by two of our Brazilian subsidiaries, resulting in the recognition of a $62
million gain. The net impact to the Company after taxes and noncontrolling interest was $9 million. Other
income also included a gain on sale of assets at Eletropaulo.
Other income of $465 million for the year ended December 31, 2009 included $165 million from the
reduction in interest and penalties associated with federal tax debts at Eletropaulo and Sul as a result of the
REFIS program and a $129 million gain related to a favorable court decision enabling Eletropaulo to receive
reimbursement of excess non-income taxes paid from 1989 to 1992 in the form of tax credits to be applied
against future tax liabilities. The net impact to the Company after income taxes and noncontrolling interests for
these items was $44 million. In addition, the Company recognized income in 2009 of $80 million from a
performance incentive bonus for management services provided to Ekibastuz and Maikuben in 2008. The
management agreement was related to the sale of these businesses in Kazakhstan in May 2008; see further
discussion of this transaction in Note 22—Acquisitions and Dispositions, to the Consolidated Financial
Statements included in Item 8 of this Form 10-K.
Other income of $375 million for the year ended December 31, 2008 included gains on the extinguishment
of a gross receipts tax liability and a legal contingency at Eletropaulo of $117 million and $75 million,
respectively, $32 million of cash proceeds related to a favorable legal settlement at Southland in California,
$29 million of insurance recoveries for damaged turbines at Uruguaiana, $23 million of gains associated with a
sale of land at Eletropaulo and sales of turbines at Itabo, and compensation of $18 million for the impairment
associated with the settlement agreement to shut down Hefei.
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Other expense

2010 2009 2008
(in millions)
Loss on sale and disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . $ 84 $ 42 $ 34
Gener gas settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 — —
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 — 70
AES Wind transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 — —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 69 57
Total other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $239 $111 $161
Other expense of $239 million for the year ended December 31, 2010 included $72 million for a settlement
agreement of gas transportation contracts at Gener. There were also previously capitalized transaction costs of
$22 million that were incurred in connection with the preparation for the sale of a noncontrolling interest in our
Wind Generation business which were written off upon the expiration of the letter of intent in June 2010. In
addition, there were losses on the disposal of assets at Eletropaulo, Panama, and Gener, an $18 million loss on
debt extinguishment at Andres and Itabo and a $15 million loss at the Parent Company from the retirement of
senior notes.
Other expense of $111 million for the year ended December 31, 2009 included a $13 million loss
recognized when three of our businesses in the Dominican Republic received $110 million par value bonds
issued by the Dominican Republic government to settle existing accounts receivable for the same amount from
the government-owned distribution companies. The loss represented an adjustment to reflect the fair value of the
bonds on the date received. Other expense also included losses on the disposal of assets at Eletropaulo and
Andres and contingencies at our businesses in Kazakhstan and Alicura in Argentina.
Other expense of $161 million for the year ended December 31, 2008 included $69 million of losses on the
retirement of debt at the Parent Company in connection with the refinancing in June 2008 and IPALCO
associated with a $375 million refinancing in April 2008 and losses on disposal of assets primarily at
Eletropaulo.
Goodwill Impairment
In 2010, the Company recognized goodwill impairment expense of $21 million. During the third quarter of
2010, Deepwater, our pet coke-fired merchant generation facility in Texas, determined that there was an interim
impairment indicator for its goodwill. This determination was primarily based on management’s decision not to
operate the plant for more than 30 days in the third quarter of 2010, current operating and cash flow losses, and
forecasted operating and cash flow losses for the remainder of 2010 through 2014 as a result of declining trends
in energy pricing curves and increasing pet coke prices. As a result, Deepwater recognized a goodwill
impairment of $18 million. Deepwater is reported in the North America Generation segment.
In 2009, the Company recognized goodwill impairment expense of $122 million. This was a result of
impairment at certain of our businesses in the United Kingdom and Ukraine as a result of the Company’s annual
goodwill impairment evaluation as of October 1. The most significant goodwill impairment was at Kilroot, our
generation business in the United Kingdom. Factors contributing to the recognition of impairment included:
reduced profit expectations based on latest estimates of future commodity prices and reduced expectations on the
recovery of cash flows on the existing plant following the Company’s decision to forgo capital expenditures to
meet emission allowance requirements taking effect in 2024. The fair value of the Company’s reporting units are
inherently sensitive to the assumptions underlying the estimates of fair value. Note 1—General and Summary of
Significant Accounting Policies, Fair Value, Goodwill and Intangibles in Item 8 of this Form 10-K provides a
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more detailed discussion of those assumptions. As discussed in Key Trends and Uncertainties, in the future, the
fair values of the Company’s reporting units might decline as a result of adverse changes in their operating
environments or the businesses reaching the end of their finite lives, which could require the Company to record
additional goodwill impairment charges.
The Company did not incur any goodwill impairment charges in 2008.
Asset Impairment Expense

As discussed in Note 19—Impairment Expense to the Consolidated Financial Statements included in Item 8
of this Form 10-K, asset impairment expense for the year 2010 was $1,221 million and consisted primarily of the
following:
Eastern Energy—AEE operates four coal-fired power plants: Cayuga, Greenidge, Somerset and Westover,
representing generation capacity of 1,169 MW in the western New York power market. During 2010, the power
prices in the New York power market trended downward, similar to North America natural gas prices. The New
York Independent System Operator (“NYISO”) continues to move forward with the potential addition of a new
capacity zone, which is expected to put further downward pressure on the capacity prices paid to the AEE
facilities. In November 2010, legislation was proposed in the state of New Jersey for the addition of state
subsidized capacity additions serving to lower PJM capacity price expectations. Similar changes to capacity
pricing may be made in the future in New York. Continued pressure on energy prices, driven by falling natural
gas prices and state actions, indicate that capacity prices are unlikely to reach levels significantly in excess of
those achieved historically. Accordingly, management’s view of long-term capacity markets in western New
York was revised downward. In December 2010, management revised its cash flow forecasts based on these
developments and forecasted continuing negative operating cash flow and losses through 2034. The forecasted
energy prices are such that a hedge strategy significantly beyond those in place at December 31, 2010 would not
be economical. Additionally, on November 15, 2010, Standard & Poor’s downgraded the bond rating of AEE
from BB to B+. Collectively, in the fourth quarter of 2010, these events were considered an impairment indicator
for the AES New York asset group, of which AEE is the most significant component and necessitated a
recoverability test of the asset group.
offset by environmental and other remediation costs. Accordingly, the long-lived asset group was considered
fully impaired and $827 million of impairment expense was recognized in the fourth quarter of 2010.
Southland—In May 2010, the California State Water Board approved a policy to reduce the number of
marine animals killed by seawater cooling systems in coastal power plants in California. At that time since the
policy required the approval of California’s Office of Administrative Law, it was unclear whether the policy
would be approved and the exact form the regulations would take. In September 2010, the Office of
Administrative Law in California approved the policy that will require the Company to change the process
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through which it uses ocean water to cool the generation turbines at its Alamitos, Huntington Beach and Redondo
Beach (collectively “Southland”) gas-fired generation facilities in California. The policy requires compliance
with the new regulations by December 31, 2020. The change in the water cooling process will result in
significant future capital expenditures to ensure compliance with the new regulations and the Company
determined that an indicator of impairment existed at September 30, 2010. The Company performed an asset
impairment test in accordance with the accounting guidance on property, plant and equipment. The asset group
was determined to be at the individual plant level and based on the undiscounted cash flow analysis, the
Company determined that the Huntington Beach asset group was not recoverable. The fair value of the
Huntington Beach asset group was then determined using a discounted cash flow analysis. To assist management
in determining the fair value of the asset group, an independent valuation firm was engaged. Cash flow forecasts
and the underlying assumptions for the valuation were developed by management. The carrying value of the
Huntington Beach plant of $288 million exceeded the fair value of $88 million resulting in the recognition of
asset impairment expense of $200 million. The undiscounted cash flows of the Alamitos and Redondo Beach
generation facilities exceeded their respective carrying values and resulted in no impairment. Huntington Beach
is reported in the North America Generation reportable segment.
Tisza II—During the third quarter of 2010, the Company entered into annual negotiations with the offtaker
of its Tisza II generation plant in Hungary. As a result of these preliminary negotiations, as well as the further
deterioration of the economic environment in Hungary, the Company determined that an indicator of impairment
existed at September 30, 2010. Thus, the Company performed an asset impairment test in accordance with the
accounting guidance on property, plant and equipment and determined that based on the undiscounted cash flow
analysis, the carrying amount of the Tisza II asset group was not recoverable. The fair value of the asset group
was then determined using a discounted cash flow analysis. The carrying value of the Tisza II asset group of
$160 million exceeded the fair value of $75 million resulting in the recognition of asset impairment expense of
$85 million. Tisza II is reported in the Europe Generation reportable segment.
Deepwater—In March 2010, Deepwater, our 160 MW pet coke-fired merchant power plant located in
goodwill and recoverability test for the long-lived asset group. Based on the results of these tests, in the second
performed another impairment evaluation of Deepwater’s goodwill and recoverability test of the long-lived asset
group. The results in the third quarter indicated no impairment was necessary for the asset group, but the
written off during the quarter ended September 30, 2010.
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fourth quarter of 2010.
Asset impairment expense for the year 2009 was $25 million. In 2009, the Company recognized a pre-tax
long-lived asset impairment charge of $11 million related to the Company’s Piabanha hydro project in Brazil.
The Company determined that the carrying value exceeded the future discounted cash flows and abandoned the
project.
Asset impairment expense for the year 2008 was $175 million. In the fourth quarter of 2008, and in response
to the financial market crisis, the Company reviewed and prioritized projects in the development pipeline. From
this review, the Company determined that the carrying value exceeded the future discounted cash flows for
certain projects. As a result, the Company recorded an impairment charge of $75 million ($34 million, net of
noncontrolling interests and income taxes) related to two liquefied natural gas projects in North America and a
non-power development project at one of our facilities in North America. During 2008, the Company recognized
additional impairment charges of $36 million related to long-lived assets at Uruguaiana. The impairment was
triggered by a combination of gas curtailments and increases in the spot market price of energy in 2007 that
continued in 2008. Following an initial impairment charge in the fourth quarter of 2007, further charges were
incurred in 2008 due to fixed asset purchase agreements in place. During the first half of 2008, the Company
withdrew from projects in South Africa and Israel which resulted in impairment charges of $36 million. The
Company also recognized an impairment of $18 million related to the shutdown of the Hefei plant in China.
Gain on sale of investments

There was no gain on sale of investments in 2010.
Gain on sale of investments of $131 million in 2009 consisted primarily of $98 million recognized in May
2009 related to the termination of the management agreement between the Company and Kazakhmys PLC for
Ekibastuz and Maikuben, a gain of $14 million from the sale of the remaining assets associated with the
shutdown of the Hefei plant in China and $13 million from the reversal of a contingent liability related to the
Kazakhstan sale in 2008.
Gain on sale of investments of $909 million in 2008 consisted primarily of the sale in May 2008 of two
wholly owned subsidiaries in Kazakhstan, Ekibastuz and Maikuben for a net gain of $905 million.
Loss on sale of subsidiary stock

There was no loss on sale of subsidiary stock in 2010 or 2009.
Loss on sale of subsidiary stock of $31 million in 2008 was the result of sales of AES Gener shares made by
our wholly owned subsidiary Cachagua. In November 2008, Cachagua sold 9.6% of its ownership in Gener to a
third party reducing its ownership in Gener to 70.6%.
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Foreign currency transaction gains (losses) on net monetary position
The following table summarizes the gains (losses) on the Company’s net monetary position from foreign
currency transaction activities:

2010 2009 2008
(in millions)
AES Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(50) $ 13 $ 38
Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 65 (96)
Philippines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 15 (57)
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (9) (44)
Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 (10) (28)
Kazakhstan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 (24) 14
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) (11) 5
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (6) (16)
Total(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(33) $ 33 $(184)
(1) Includes (losses) gains of $(10) million, $(39) million and $10 million on foreign currency derivative
contracts for the years ended December 31, 2010, 2009 and 2008, respectively.
The Company recognized foreign currency transaction losses of $33 million for the year ended
December 31, 2010. These losses consisted primarily of losses at The AES Corporation partially offset by gains
in Argentina.
• Losses of $50 million at The AES Corporation were primarily due to the devaluation of notes
receivable resulting from the weakening of the Euro and British Pound, and losses on foreign exchange
swaps and options, partially offset by gains on cash balances and debt denominated in British Pounds.
• Gains of $12 million in Argentina were primarily due to a gain on a foreign currency embedded
derivative related to government receivables, partially offset by losses due to the devaluation of the
Argentine Peso by 5%, resulting in losses at Alicura (an Argentine Peso functional currency subsidiary)
associated with its U.S. Dollar denominated debt.
The Company recognized foreign currency transaction gains of $33 million for the year ended
December 31, 2009. These gains consisted primarily of gains in Chile, the Philippines and at The AES
Corporation partially offset by losses in Kazakhstan, Colombia, Argentina and Brazil.
• Gains of $65 million in Chile were primarily due to the appreciation of the Chilean Peso of 20%
resulting in gains at Gener (a U.S. Dollar functional currency subsidiary) associated with its net
working capital denominated in Chilean Peso, mainly cash and accounts receivables. This gain was
partially offset by $14 million in losses on foreign currency derivatives.
• Gains of $15 million in the Philippines were primarily due to the appreciation of the Philippine Peso of
3%, resulting in gains at Masinloc (a Philippine Peso functional currency subsidiary) on the
remeasurement of U.S. Dollar denominated debt.
• Gains of $13 million at The AES Corporation were primarily due to the settlement of the senior
unsecured credit facility and the revaluation of notes receivable denominated in the Euro, partially
offset by losses on debt denominated in British Pounds.
• Losses of $24 million in Kazakhstan were primarily due to net foreign currency transaction losses of
$12 million related to energy sales denominated and fixed in the U.S. Dollar and $12 million of foreign
currency transaction losses on debt and other liabilities denominated in currencies other than the
Kazakh Tenge.
146
• Losses of $11 million in Colombia were primarily due to the appreciation of the Colombian Peso of
9%, resulting in losses at Chivor (a U.S. Dollar functional currency subsidiary) associated with its
Colombian Peso denominated debt and losses on foreign currency derivatives.
• Losses of $10 million in Argentina were primarily due to the devaluation of the Argentine Peso of 10%
in 2009, resulting in losses at Alicura (an Argentine Peso functional currency subsidiary) associated
with its U.S. Dollar denominated debt, partially offset by derivative gains.
• Losses of $9 million in Brazil were primarily due to energy purchases made by Eletropaulo
denominated in U.S. Dollar, resulting in foreign currency transaction losses of $18 million, partially
offset by gains of $9 million due to the appreciation in 2009 of the Brazilian Real of 25%, resulting in
gains at Sul and Uruguaiana associated with U.S. Dollar denominated liabilities.
The Company recognized foreign currency transaction losses of $184 million for the year ended
December 31, 2008. These losses consisted primarily of losses in Chile, the Philippines, Brazil and Argentina
partially offset by gains at The AES Corporation and in Kazakhstan.
• Losses of $96 million in Chile were primarily due to the devaluation of the Chilean Peso of 28% in
2008, resulting in losses at Gener (a U.S. Dollar functional currency subsidiary) associated with its net
working capital denominated in Chilean Pesos, mainly cash, accounts receivable and value added tax
(“VAT”) receivables.
• Losses of $57 million in the Philippines were primarily due to remeasurement losses at Masinloc (a
Philippine Peso functional currency subsidiary) on U.S. Dollar denominated debt resulting from
depreciation of the Philippine Peso of 14% in 2008.
• Losses of $44 million in Brazil were primarily due to the realization of deferred exchange variance on
past energy purchases made by Eletropaulo denominated in U.S. Dollar.
• Losses of $28 million in Argentina were primarily due to the devaluation of the Argentine Peso of 10%
in 2008, resulting in losses at Alicura (an Argentine Peso functional currency subsidiary) associated
with its U.S. Dollar denominated debt.
• Gains of $38 million at The AES Corporation were primarily due to debt denominated in British
Pounds and gains on foreign exchange derivatives, partially offset by losses on notes receivable
denominated in the Euro.
• Gains of $14 million in Kazakhstan were primarily due to net foreign currency transaction gains of
$16 million related to energy sales denominated and fixed in the U.S. Dollar, offset by $5 million of
foreign currency transaction losses on external and intercompany debt denominated in other than the
Kazakh Tenge functional currency.
Income taxes
Income tax expense on continuing operations decreased $292 million, or 49%, to $307 million in 2010. The
Company’s effective tax rates were 29% for 2010 and 26% for 2009.
The net increase in the 2010 effective tax rate was primarily due to tax expense recorded in the second
quarter of 2010 relating to the CEMIG sale transaction, tax benefit recorded in 2009 upon the release of valuation
allowances at certain U.S. and Brazilian subsidiaries, and $165 million of non-taxable income recorded in 2009
at Brazil as a result of the REFIS program. These items were offset by income tax benefits related to a reversal of
withholding tax liabilities at certain Chilean subsidiaries and 2010 asset impairments primarily recorded at
certain U.S. subsidiaries. Included in the net tax expense related to the CEMIG sale transaction is tax expense on
the equity earnings associated with the reversal of the net long-term liability and tax benefit related to release of a
valuation allowance against certain deferred tax assets.
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Income tax expense on continuing operations decreased $172 million, or 22%, to $599 million in 2009. The
Company’s effective tax rates were 26% for 2009 and 29% for 2008.
The net decrease in the 2009 effective tax rate was primarily due to tax benefit recorded in 2009 upon the
release of valuation allowance at certain U.S. and Brazilian subsidiaries, $165 million of non-taxable income
recorded at Brazil as a result of the REFIS program in 2009 and an increase in U.S. taxes on distributions from
the Company’s primary holding company in the second quarter of 2008.
Net equity in earnings of affiliates

Net equity in earnings of affiliates increased $91 million, or 99%, to $183 million in 2010 from $92 million
in 2009. This increase was primarily due to a gain recognized upon the sale of our interest in CEMIG during the
second quarter of 2010, partially offset by 2009 equity in earnings of Cartagena which was accounted for as a
consolidated entity in 2010 and thus reported directly within revenues and expenses.
Net equity in earnings of affiliates increased $59 million, or 179%, to $92 million in 2009 from $33 million
in 2008. This increase was primarily due to a cash settlement received by Cartagena, in Spain, in June 2009 for
liquidated damages received related to a construction delay from December 2005 to November 2006; increased
earnings at Guacolda in Chile mainly due to lower cost of coal; increased earnings of Chigen affiliates from
higher tariffs partially offset by lower volume and a valuation write-off in 2008 at an affiliate in Turkey. These
increases were partially offset by decreased earnings at OPGC, in India, mainly due to lower tariff and a dividend
distribution tax in March 2009 and increased expenses for an equipment overhaul at Elsta in the Netherlands.
Income from continuing operations attributable to noncontrolling interests

Income from continuing operations attributable to noncontrolling interests decreased $93 million, or 8%, to
$1.0 billion in 2010 from $1.1 billion in 2009. This decrease was primarily due to decreased earnings at
Eletropaulo as a result of the absence of legal settlement income present in 2009, a loss on legal settlement at
Gener and reduced revenues due to decreased coal prices along with higher electricity purchases at Itabo. These
decreases were partially offset by the appreciation of the Brazilian Real.
Income from continuing operations attributable to noncontrolling interests increased $340 million, or 45%,
to $1.1 billion in 2009 from $0.8 billion in 2008. This increase was primarily due to increases in gross margin
and other income, lower interest expense and a decrease in impairments in 2009 at our Brazilian businesses, and
increases in gross margin and foreign currency transaction gains at our businesses in Chile. In addition, in the
fourth quarter of 2009, income from continuing operations attributable to noncontrolling interests increased $44
million at certain of our wind generation businesses as a result of a charge related to the potential future taxes
that could be deemed due in the calculation of the hypothetical liquidation value of certain of our wind tax equity
partnerships.
Discontinued operations
As further discussed in Note 21—Discontinued Operations and Held for Sale Businesses to the
Consolidated Financial Statements included in Item 8 of this Form 10-K, Discontinued Operations includes the
results of five businesses: Ras Laffan, a generation business in Qatar (sold in October 2010); Barka, a generation
business in Oman, (sold in August 2010); Lal Pir and Pak Gen, generation businesses in Pakistan, (sold in June
2010); and Jiaozuo, a generation business in China, (sold in December 2008). Prior periods have been restated to
reflect these businesses within Discontinued Operations for all periods presented.
In 2010, income from operations of discontinued businesses, net of tax and income attributable to
noncontrolling interests, was $39 million and reflected the operations of our 55% stake in Ras Laffan, a
combined cycle gas facility and water desalination plant in Qatar, our 35% stake in Barka, a combined cycle gas
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facility and water desalination plant in Oman and our 55% stake in Lal Pir and Pak Gen, two oil-fired facilities in
Pakistan. The sale of Lal Pir and Pak Gen closed in June 2010, resulting in additional impairment expense and a
loss on the sale in 2010 of $14 million, net of tax and noncontrolling interests. The Barka plant was sold in
August 2010, resulting in a gain on sale of $63 million, net of tax and noncontrolling interests. The sale of Ras
Laffan closed in October 2010, resulting in a gain on sale of $6 million, net of tax.
noncontrolling interests, was $54 million and reflected the operations of Ras Laffan, Barka, Lal Pir and Pak Gen.
Loss on disposal of discontinued businesses, net of tax and loss attributable to noncontrolling interests was $105
million and represented the difference between the net book value of the Company’s interests in its Pakistan
businesses and their estimated fair value.
noncontrolling interests, was $60 million and reflected the operations of Ras Laffan, Barka, Lal Pir, Pak Gen and
Jiaozuo, a coal-fired generation facility in China sold in December 2008. The Company received $73 million for
its 70% interest in the business. The net gain on the disposition was $7 million.
Critical Accounting Estimates

The Consolidated Financial Statements of AES are prepared in conformity with GAAP, which requires the
use of estimates, judgments and assumptions that affect the reported amounts of assets and liabilities at the date
of the financial statements and the reported amounts of revenue and expenses during the periods presented. AES’
significant accounting policies are described in Note 1—General and Summary of Significant Accounting
Policies to the Consolidated Financial Statements included in Item 8 of this Form 10-K.
An accounting estimate is considered critical if:

• the estimate requires management to make assumptions about matters that were highly uncertain at the
time the estimate was made;
• different estimates reasonably could have been used; or
• the impact of the estimates and assumptions on financial condition or operating performance is
material.
Management believes that the accounting estimates employed are appropriate and the resulting balances are
reasonable; however, actual results could materially differ from the original estimates, requiring adjustments to
these balances in future periods. Management has discussed these critical accounting policies with the Audit
Committee, as appropriate. Listed below are the Company’s most significant critical accounting estimates and
assumptions used in the preparation of the Consolidated Financial Statements.
Income Tax Reserves

We are subject to income taxes in both the United States and numerous foreign jurisdictions. Our worldwide
income tax provision requires significant judgment and is based on calculations and assumptions that are subject
to examination by the Internal Revenue Service and other taxing authorities. The Company and certain of its
subsidiaries are under examination by relevant taxing authorities for various tax years. The Company regularly
assesses the potential outcome of these examinations in each of the tax jurisdictions when determining the
adequacy of the provision for income taxes. Accounting guidance for uncertainty in income taxes prescribes a
more-likely-than-not recognition threshold. Tax reserves have been established, which the Company believes to
be adequate in relation to the potential for additional assessments. Once established, reserves are adjusted only
when there is more information available or when an event occurs necessitating a change to the reserves. While
the Company believes that the amounts of the tax estimates are reasonable, it is possible that the ultimate
outcome of current or future examinations may exceed current reserves in amounts that could be material.
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On December 17, 2010, President Obama signed into law the Tax Relief Unemployment Insurance
Reauthorization and Job Creation Act of 2010 (“the Act”). The Act includes several provisions which provide for
tax relief for businesses by extending certain tax benefits and credits, including the Subpart F exception for active
financing income and the Controlled Foreign Corporation look-through provisions of Subpart F. This legislation
resulted in a benefit for the Company’s 2010 provision for income taxes; however, there can be no assurances
that the benefits of this legislation will extend beyond 2011, when it is currently scheduled to expire.
Impairments
Our accounting policies on goodwill and long-lived assets are described in detail in Note 1—General and
Summary of Significant Accounting Policies, Goodwill and Other Intangibles and Long-lived Assets,
respectively, included in Item 8 of this Form 10-K. Goodwill is tested annually for impairment at the reporting
unit level on October 1. In addition, goodwill is tested for impairment whenever events or circumstances indicate
that it is more likely than not that the fair value of a reporting unit has been reduced below its carrying amount. A
long-lived asset (asset group) will be tested for recoverability whenever events or changes in circumstances
indicate that its carrying amount may not be recoverable, i.e., the future undiscounted cash flows associated with
the asset are less than its carrying amount. In the event that the carrying amount of the long-lived asset (asset
group) is not recoverable, an impairment evaluation is performed, in which the fair value of the asset is estimated
and compared to the carrying amount. Examples of indicators that would result in an impairment test for
goodwill and a recoverability test for long-lived assets include, but are not limited to, a significant adverse
change in the business climate, legislation changes or a change in the extent or manner in which a long-lived
asset is being used or in its physical condition. Throughout the impairment evaluation process, management
makes considerable judgments; however, the fair value determination is typically the most judgmental part of an
impairment evaluation.
The Company determines the fair value of a reporting unit or a long-lived asset (asset group) by applying
the approaches prescribed under the fair value measurement accounting framework. Generally, the market
approach and income approach are most relevant in the fair value measurement of our reporting units and long-
lived assets; however, due to the lack of available relevant observable market information in many
circumstances, the Company often relies on the income approach. The Company may engage an independent
valuation firm to assist management with the valuation. The decision to engage an independent valuation firm
considers all relevant facts and circumstances, including a cost/benefit analysis and the Company’s internal
valuation knowledge of the long-lived asset (asset group) or business. The Company develops the underlying
assumptions consistent with its internal budgets and forecasts for such valuations. Additionally, the Company
uses an internal discounted cash flow valuation model (the “DCF model”), based on the principles of present
value techniques, to estimate the fair value of its reporting units or long-lived assets under the income approach.
The DCF model estimates fair value by discounting our internal budgets and cash flow forecasts, adjusted to
reflect market participant assumptions, to the extent necessary, at an appropriate discount rate.
Management applies considerable judgment in selecting several input assumptions during the development
of our internal budgets and cash flow forecasts. Examples of the input assumptions that our budgets and forecasts
are sensitive to include macroeconomic factors such as growth rates, industry demand, inflation, exchange rates,
power prices and commodity prices. Whenever appropriate, management obtains these input assumptions from
observable market data sources and extrapolates the market information if an input assumption is not observable
for the entire forecast period. Many of these input assumptions are dependent on other economic assumptions,
which are often derived from statistical economic models with inherent limitations such as estimation
differences. Further, several input assumptions are based on historical trends which often do not recur. The input
assumptions most significant to our budgets and cash flows are based on expectations of macroeconomic factors
which have been volatile recently. It is not uncommon that different market data sources have different views of
the macroeconomic factors expectations and related assumptions. As a result, macroeconomic factors and related
assumptions are often available in a narrow range; however, in some situations these ranges become wide and the
use of a different set of input assumptions could produce significantly different budgets and cash flow forecasts.
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A considerable amount of judgment is also applied in the estimation of the discount rate used in the DCF
model. To the extent practical, inputs to the discount rate are obtained from market data sources (e.g.,
Bloomberg, Capital IQ, etc.). The Company selects and uses a set of publicly traded companies from the relevant
industry to estimate the discount rate inputs. Management applies judgment in the selection of such companies
based on its view of the most likely market participants. It is reasonably possible that the selection of a different
set of likely market participants could produce different input assumptions and result in the use of a different
discount rate.
Fair value of a reporting unit or a long-lived asset (asset group) is sensitive to both input assumptions to our
budgets and cash flow forecasts and the discount rate. Further, estimates of long-term growth and terminal value
are often critical to the fair value determination. As part of the impairment evaluation process, management
analyzes the sensitivity of fair value to various underlying assumptions. The level of scrutiny increases as the gap
between fair value and carrying amount decreases. Changes in any of these assumptions could result in
management reaching a different conclusion regarding the potential impairment, which could be material. Our
impairment evaluations inherently involve uncertainties from uncontrollable events that could positively or
negatively impact the anticipated future economic and operating conditions.
Further discussion of the impairment charges recognized by the Company can be found within
Management’s Discussion and Analysis, Consolidated Results of Operations—Goodwill Impairment and Asset
Impairment Expense and Note 19—Impairment Expense and Note 8—Goodwill and Other Intangible Assets to
the Consolidated Financial Statements included in Item 8 of this Form 10-K.
Fair Value
Fair Value of Financial Instruments
A significant number of the Company’s financial instruments are carried at fair value with changes in fair
value recognized in earnings or other comprehensive income each period. The Company makes estimates
regarding the valuation of assets and liabilities measured at fair value in preparing the Consolidated Financial
Statements. These assets and liabilities include short and long-term investments in debt and equity securities,
included in the balance sheet line items “Short-term investments” and “Other assets (Noncurrent)”, derivative
assets, included in “Other current assets” and “Other assets (Noncurrent)” and derivative liabilities, included in
“Accrued and other liabilities (current)” and “Other long-term liabilities”. The Company uses valuation
techniques and methodologies that maximize the use of observable inputs and minimize the use of unobservable
inputs. Where available, fair value is based on observable market prices or parameters or derived from such
prices or parameters. Where observable prices are not available, valuation models are applied to estimate the fair
value using the available observable inputs. The valuation techniques involve some level of management
estimation and judgment, the degree of which is dependent on the price transparency for the instruments or
market and the instruments’ complexity. Investments are generally fair valued based on quoted market prices or
other observable market data such as interest rate indices. The Company’s investments are primarily certificates
of deposit, government debt securities and money market funds. Derivatives are valued using observable data as
inputs into internal valuation models. The Company’s derivatives primarily consist of interest rate swaps, foreign
currency instruments, and commodity and embedded derivatives. Additional discussion regarding the nature of
these financial instruments and valuation techniques can be found in Note 4—Fair Value in Item 8 of this
Form 10-K.
Accounting for Derivative Instruments and Hedging Activities

We enter into various derivative transactions in order to hedge our exposure to certain market risks. We
primarily use derivative instruments to manage our interest rate, commodity and foreign currency exposures. We
do not enter into derivative transactions for trading purposes.
In accordance with the accounting standards for derivatives and hedging, we recognize all derivatives as
either assets or liabilities in the balance sheet and measure those instruments at fair value except where
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derivatives qualify and are designated as “normal purchase/normal sale” transactions. Changes in fair value of
derivatives are recognized in earnings unless specific hedge criteria are met. Income and expense related to
derivative instruments are recognized in the same category as generated by the underlying asset or liability.
The accounting standards for derivatives and hedging enable companies to designate qualifying derivatives
as hedging instruments based on the exposure being hedged. These hedge designations include fair value hedges
and cash flow hedges. Changes in the fair value of a derivative that is highly effective and is designated and
qualifies as a fair value hedge, are recognized in earnings as offsets to the changes in fair value of the exposure
being hedged. The Company has no fair value hedges at this time. Changes in the fair value of a derivative that is
highly effective and is designated as and qualifies as a cash flow hedge, are deferred in accumulated other
comprehensive income and are recognized into earnings as the hedged transactions occur. Any ineffectiveness is
recognized in earnings immediately. For all hedge contracts, the Company provides formal documentation of the
hedge and effectiveness testing in accordance with the accounting standards for derivatives and hedging.
The fair value measurement accounting standard provides additional guidance on the definition of fair value
and defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date, or exit price. The fair value
measurement standard requires the Company to consider and reflect the assumptions of market participants in the
fair value calculation. These factors include nonperformance risk (the risk that the obligation will not be fulfilled)
and credit risk, both of the reporting entity (for liabilities) and of the counterparty (for assets). Due to the nature
of the Company’s interest rate swaps, which are typically associated with non-recourse debt, credit risk for AES
is evaluated at the subsidiary level rather than at the Parent Company level. Nonperformance risk on the
Company’s derivative instruments is an adjustment to the initial asset/liability fair value position that is derived
from internally developed valuation models that utilize observable market inputs.
As a result of uncertainty, complexity and judgment, accounting estimates related to derivative accounting
could result in material changes to our financial statements under different conditions or utilizing different
assumptions. As a part of accounting for these derivatives, we make estimates concerning nonperformance,
volatilities, market liquidity, future commodity prices, interest rates, credit ratings (both ours and our
counterparty’s) and exchange rates.
The fair value of our derivative portfolio is generally determined using internal valuation models, most of
which are based on observable market inputs including interest rate curves and forward and spot prices for
currencies and commodities. The Company derives most of its financial instrument market assumptions from
market efficient data sources (e.g., Bloomberg and Platt’s). In some cases, where market data is not readily
available, management uses comparable market sources and empirical evidence to derive market assumptions to
determine a financial instrument’s fair value. In certain instances, the published curve may not extend through
the remaining term of the contract and management must make assumptions to extrapolate the curve.
Additionally, in the absence of quoted prices, we may rely on “indicative pricing” quotes from financial
institutions to input into our valuation model for certain of our foreign currency swaps. These indicative pricing
quotes do not constitute either a bid or ask price and therefore are not considered observable market data. For
individual contracts, the use of different valuation models or assumptions could have a material effect on the
calculated fair value.
Fair Value of Nonfinancial Assets and Liabilities

The Company adopted the fair value measurement accounting guidance for nonfinancial assets and
liabilities effective January 1, 2009. The most significant of these estimates surround the fair value measurement
of long-lived tangible and intangible assets when tested for impairment upon a triggering event or during the
annual impairment evaluation for indefinite-lived intangible assets, including goodwill. These estimates include
making assumptions regarding useful life, the impact of economic obsolescence and expected future cash flows.
Additional factors are discussed above in the Impairments section.
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Fair Value Hierarchy
The Company uses valuation techniques and methodologies that maximize the use of observable inputs and
minimize the use of unobservable inputs. Where available, fair value is based on observable market prices or
parameters or derived from such prices or parameters. Where observable prices are not available, valuation
models are applied to estimate the fair value using the available observable inputs. The valuation techniques
involve some level of management estimation and judgment, the degree of which is dependent on the price
transparency for the instruments or market and the instruments’ complexity.
To increase consistency and enhance disclosure of the fair value of financial instruments, the fair value
measurement standard creates a fair value hierarchy to prioritize the inputs used to measure fair value into three
categories. A financial instrument’s level within the fair value hierarchy is based on the lowest level of input
significant to the fair value measurement, where Level 1 is the highest and Level 3 is the lowest. For more
information regarding the fair value hierarchy, see Note 1—General and Summary of Significant Accounting
Policies in Item 8. Financial Statements and Supplementary Data of this Form 10-K.
Regulatory Assets and Liabilities

The Company accounts for certain of its regulated operations in accordance with the regulatory accounting
standards. As a result, AES recognizes assets and liabilities that result from the regulated ratemaking process that
would not be recognized under GAAP for non-regulated entities. Regulatory assets generally represent incurred
costs that have been deferred because such costs are probable of future recovery through customer rates.
Regulatory liabilities generally represent obligations to make refunds to customers for previous collections for
costs that are not likely to be incurred or included in future rate initiatives. Management continually assesses
whether the regulatory assets are probable of future recovery by considering factors such as applicable regulatory
changes, recent rate orders applicable to other regulated entities and the status of any pending or potential
deregulation legislation. If future recovery of costs ceases to be probable, any asset write-offs would be required
to be recognized in operating income.
New Accounting Pronouncements Adopted

Effective January 1, 2010, we adopted new accounting provisions related to the following topics as a result
of new accounting guidance issued by the Financial Accounting Standards Board (“FASB”). The financial
statement impact of these new accounting pronouncements is included in Note 1—General and Summary of
Significant Accounting Policies included in Item 8 of this Form 10-K.
• Consolidations, Improvements to Financial Reporting by Enterprises Involved with Variable Interest
Entities (“VIEs”). The new accounting guidance on the consolidation of VIEs requires an entity to
qualitatively, rather than quantitatively, assess the determination of the primary beneficiary of a VIE.
This determination is based on whether the entity has the power to direct the activities that most
significantly impact the economic performance of the VIE and the obligation to absorb losses or the
right to receive benefits of the VIE that could potentially be significant to the VIE. Other key changes
include: a requirement for the ongoing reconsideration of the primary beneficiary, the criteria for
determining whether service provider or decision maker contracts are variable interests, the
consideration of kick-out and removal rights in determining whether an entity is a VIE, the types of
events that trigger the reassessment of whether an entity is a VIE and the expansion of the disclosures
previously required. The adoption of the new accounting guidance on the consolidation of VIEs
resulted in the deconsolidation of certain immaterial VIEs previously consolidated. Additionally,
assets, liabilities and operating results of two of the Company’s VIEs, previously accounted for under
the equity method of accounting, were required to be consolidated. Cartagena, a 71% owned generation
business in Spain, and Cili, a 51% owned generation business in China, were consolidated under the
new guidance.
• Accounting for Transfers of Financial Assets. The new accounting guidance on transfers of financial
assets, among other things: removes the concept of a qualifying special purpose entity; introduces the
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concept of participating interests and specifies that in order to qualify for sale accounting a partial
transfer of a financial asset or a group of financial assets should meet the definition of a participating
interest; clarifies that an entity should consider all arrangements made contemporaneously with or in
contemplation of a transfer and requires enhanced disclosures to provide financial statement users with
greater transparency about transfers of financial assets and a transferor’s continuing involvement with
transfers of financial assets accounted for as sales. Upon adoption on January 1, 2010, the Company
recognized $40 million as accounts receivable and as an associated secured borrowing on its
Consolidated Balance Sheet; both of which have since increased to $50 million as of December 31,
2010, as additional interests in receivables have been sold. While securitizing these accounts receivable
through IPL Funding, a special purpose entity, IPL, the Company’s integrated utility in Indianapolis,
had previously recognized the transaction as a sale, but had not recognized the accounts receivable and
secured borrowing on its balance sheet.
Accounting Pronouncements Issued But Not Yet Effective

The following accounting standards have been issued, but as of December 31, 2010 are not yet effective for
and have not been adopted by AES.
Accounting Standards Update (“ASU”) No. 2010-28, Intangibles—Goodwill and Other (Topic 350), When to
Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying Amounts
In December 2010, the FASB issued ASU No. 2010-28, which amends the accounting guidance related to
goodwill. The amendments in ASU No. 2010-28 modify Step 1 of the goodwill impairment test for reporting
units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of
the goodwill impairment test if it is more likely than not that a goodwill impairment exists, eliminating an
entity’s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the
reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more
likely than not impaired. In determining whether it is more likely than not that a goodwill impairment exists, an
entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist.
ASU No. 2010-28 is effective for fiscal years, and interim periods within those years, beginning after
December 15, 2010, or January 1, 2011 for AES. Early adoption is prohibited. The adoption is not expected to
have a material impact on the Company’s financial position, results of operations or cash flows.
Capital Resources and Liquidity

Overview. In November 2009, the Company announced a binding stock purchase agreement with CIC, to
sell 125.5 million shares of AES stock to CIC, representing a 15% ownership stake in the Company. The
transaction closed in March 2010 and generated $1.58 billion of new equity to fund future growth opportunities.
During 2010, the Company redeemed $690 million aggregate principal of its outstanding 8.75% Second Priority
Senior Secured Notes due 2013. The Notes were redeemed in May and October 2010 at a redemption price equal
to 101.458% of the principal amount redeemed.
As of December 31, 2010, the Company had unrestricted cash and cash equivalents of $2.6 billion, of which
approximately $1.1 billion is held at the Parent Company and qualified holding companies, and short term
investments of $1.7 billion. In addition, we had restricted cash and debt service reserves of $1.3 billion. The
Company also had non-recourse and recourse aggregate principal amounts of debt outstanding of $15.1 billion
and $4.6 billion, respectively. Of the approximately $2.6 billion of our short-term non-recourse debt, $1.2 billion
is presented as current because it is due in the next twelve months and $1.4 billion relates to defaulted debt. We
expect such current maturities will be repaid from net cash provided by operating activities of the subsidiary to
which the debt relates or through opportunistic refinancing activity or some combination thereof. Approximately
$463 million of our recourse debt matures within the next twelve months, which we expect to repay using cash
on hand at the Parent Company or through net cash provided by operating activities. See further discussion of
Parent Company Liquidity below.
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The Company has two types of debt reported on its consolidated balance sheet: non-recourse and recourse
debt. Non-recourse debt is used to fund investments and capital expenditures for construction and acquisition of
our electric power plants, wind projects and distribution facilities at our subsidiaries. Non-recourse debt is
generally secured by the capital stock, physical assets, contracts and cash flows of the related subsidiary. The
default risk is limited to the respective business and is without recourse to the Parent Company and other
subsidiaries. Recourse debt is direct borrowings by the Parent Company and is used to fund development,
construction or acquisitions, including funding for equity investments or to provide loans to the Parent
Company’s subsidiaries or affiliates. This Parent Company debt is with recourse to the Parent Company and is
structurally subordinated to the debt of the Parent Company’s subsidiaries or affiliates, except to the extent such
subsidiaries or affiliates guarantee the Parent Company’s debt.
We rely mainly on long-term debt obligations to fund our construction activities. We have, to the extent
available at acceptable terms, utilized non-recourse debt to fund a significant portion of the capital expenditures
and investments required to construct and acquire our electric power plants, distribution companies and related
assets. Our non-recourse financing is designed to limit cross default risk to the Parent Company or other
subsidiaries and affiliates. Our non-recourse long-term debt is a combination of fixed and variable interest rate
instruments. Generally, a portion or all of the variable rate debt is fixed through the use of interest rate swaps. In
addition, the debt is typically denominated in the currency that matches the currency of the revenue expected to
be generated from the benefiting project, thereby reducing currency risk. In certain cases, the currency is
matched through the use of derivative instruments. The majority of our non-recourse debt is funded by
international commercial banks, with debt capacity supplemented by multilaterals and local regional banks. For
more information on our long-term debt, see Note 10—Debt of the Consolidated Financial Statements included
in Item 8. of this Form 10-K.
Given our long-term debt obligations, the Company is subject to interest rate risk on debt balances that
accrue interest at variable rates. When possible, the Company will borrow funds at fixed interest rates or hedge
its variable rate debt to fix its interest costs on such obligations. In addition, the Company has historically tried to
maintain at least 70% of its consolidated long-term obligations at fixed interest rates, including fixing the interest
rate through the use of interest rate swaps. These efforts apply to the notional amount of the swaps compared to
the amount of related underlying debt. While the Company believes that this represents an economic hedge, the
Company is required to mark-to-market all of these interest rate swaps and other derivatives. Presently, the
Parent Company’s only direct exposure to variable interest rate debt relates to indebtedness under its senior
secured credit facility. On a consolidated basis, of the Company’s $19.7 billion of total debt outstanding as of
December 31, 2010, approximately $5.0 billion bore interest at variable rates that were not subject to a derivative
instrument which fixed the interest rate.
In addition to utilizing non-recourse debt at a subsidiary level when available, the Parent Company provides
a portion, or in certain instances all, of the remaining long-term financing or credit required to fund development,
construction or acquisition of a particular project. These investments have generally taken the form of equity
investments or intercompany loans, which are subordinated to the project’s non-recourse loans. We generally
obtain the funds for these investments from our cash flows from operations, proceeds from the sales of assets
and/or the proceeds from our issuances of debt, common stock and other securities. Similarly, in certain of our
businesses, the Parent Company may provide financial guarantees or other credit support for the benefit of
counterparties who have entered into contracts for the purchase or sale of electricity, equipment or other services
with our subsidiaries or lenders. In such circumstances, if a business defaults on its payment or supply obligation,
the Parent Company will be responsible for the business’ obligations up to the amount provided for in the
relevant guarantee or other credit support. At December 31, 2010, the Parent Company had provided outstanding
financial and performance-related guarantees or other credit support commitments to or for the benefit of our
businesses, which were limited by the terms of the agreements, of approximately $415 million in aggregate
(excluding investment commitments and those collateralized by letters of credit and other obligations discussed
below).
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As a result of the Parent Company’s below investment grade rating, counterparties may be unwilling to
accept our general unsecured commitments to provide credit support. Accordingly, with respect to both new and
existing commitments, the Parent Company may be required to provide some other form of assurance, such as a
letter of credit, to backstop or replace our credit support. The Parent Company may not be able to provide
adequate assurances to such counterparties. To the extent we are required and able to provide letters of credit or
other collateral to such counterparties, this will reduce the amount of credit available to us to meet our other
liquidity needs. At December 31, 2010, we had $85 million in letters of credit outstanding, which operate to
guarantee performance relating to certain project development activities and business operations. These letters of
credit were provided under the senior secured credit facility. During the year ended December 31, 2010, the
Company paid letter of credit fees ranging from 3.19% to 3.75% per annum on the outstanding amounts.
We expect to continue to seek, where possible, non-recourse debt financing in connection with the assets or
businesses that we or our affiliates may develop, construct or acquire. However, depending on local and global
market conditions and the unique characteristics of individual businesses, non-recourse debt may not be available
on economically attractive terms or at all. See Global Economic Conditions discussion above. If we decide not to
provide any additional funding or credit support to a subsidiary project that is under construction or has near-
term debt payment obligations and that subsidiary is unable to obtain additional non-recourse debt, such
subsidiary may become insolvent, and we may lose our investment in that subsidiary. Additionally, if any of our
subsidiaries lose a significant customer, the subsidiary may need to withdraw from a project or restructure the
non-recourse debt financing. If we or the subsidiary choose not to proceed with a project or are unable to
successfully complete a restructuring of the non-recourse debt, we may lose our investment in that subsidiary.
Many of our subsidiaries depend on timely and continued access to capital markets to manage their liquidity
needs. The inability to raise capital on favorable terms, to refinance existing indebtedness or to fund operations
and other commitments during times of political or economic uncertainty may have material adverse effects on
the financial condition and results of operations of those subsidiaries. In addition, changes in the timing of tariff
increases or delays in the regulatory determinations under the relevant concessions could affect the cash flows
and results of operations of our businesses.
As of December 31, 2010, the Company had approximately $347 million of trade accounts receivable
related to certain of its generation and utility businesses in Latin America classified as other long-term assets.
These consist primarily of trade accounts receivable that, pursuant to amended agreements or government
resolutions, have collection periods that extend beyond December 31, 2011, or one year past the balance sheet
date. The Company is actively collecting these receivables and does not expect any significant collection issues.
Additionally, the current portion of these trade accounts receivable was $101 million at December 31, 2010.
Capital Expenditures
The Company spent $2.3 billion, $2.5 billion and $2.9 billion on capital expenditures in 2010, 2009 and
2008, respectively. A significant majority of these costs were funded with non-recourse debt consistent with our
financial strategy. At December 31, 2010, the Company had a total of $432 million of availability under long-
term non-recourse construction credit facilities. As more fully described in Key Trends and Uncertainties above,
we have taken steps to decrease the amount of new discretionary capital spending. We expect to continue funding
projects that are currently in the construction phase using existing capital provided by these non-recourse credit
facilities as supplemented by internally generated cash flows, Parent Company liquidity, contribution from
existing or new partners and other funding sources. As a result, property, plant and equipment and long-term
non-recourse debt are expected to increase over the next few years even though the rate of discretionary spending
has decreased. While we believe we have the resources to continue funding the projects in construction, there can
be no assurances that we will continue to fund all these existing construction efforts.
As of December 31, 2010, the Company had $66 million of commitments to invest in subsidiaries under
construction and to purchase related equipment, excluding $26 million of such obligations already included in the
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letters of credit discussed above. The Company expects to fund these net investment commitments in 2011. The
exact payment schedules will be dictated by the construction milestones. We expect to fund these commitments
from a combination of current liquidity and internally generated Parent Company cash flow.
Environmental Capital Expenditures

The Company continues to assess the possible need for capital expenditures associated with international,
federal, regional and state regulation of GHG emissions from electric power generation facilities. Currently in the
United States there is no Federal legislation establishing mandatory GHG emissions reduction programs
(including CO2) affecting the electric power generating facilities of the Company’s subsidiaries. There are
numerous state programs regulating GHG emissions from electric power generation facilities and there is a
possibility that federal GHG legislation will be enacted within the next several years. Further, the EPA has
adopted regulations pertaining to GHG emissions and has announced its intention to propose new regulations for
electric generating units under Section 111 of the CAA. The EPA regulations and any subsequent Federal
legislation, if enacted, may place significant costs on GHG emissions from fossil fuel-fired electric power
generation facilities, particularly coal-fired facilities, and in order to comply, CO2 emitting facilities may be
required to purchase additional GHG emissions allowances or offsets under cap-and-trade programs, pay a
carbon tax or install new emission reduction equipment to capture or reduce the amount of GHG emitted from
the facilities, in the event that reliable technology to do so is developed. The capital expenditures required to
comply with any future GHG legislation or any GHG regulations could be significant and unless such costs can
be passed on to customers or counterparties, such regulations could impair the profitability of some of the electric
power generation facilities operated by our subsidiaries or render certain of them uneconomical to operate, either
of which could have a material adverse effect on our consolidated results of operations and financial condition.
With respect to our operations outside the United States, certain of the businesses operated by the
Company’s subsidiaries are subject to compliance with EU ETS and the Kyoto Protocol in certain countries and
other country-specific programs to regulate GHG emissions. To date, compliance with the Kyoto Protocol and
EU ETS has not had a material adverse effect on the Company’s consolidated results of operations, financial
condition and cash flows because of, among other factors, the cost of GHG emission allowances and/or the
ability of our businesses to pass the cost of purchasing such allowances on to customers or counterparties.
However, in the event that such counterparties or regulatory authorities challenge our ability to pass these costs
on, there can be no assurance that the Company and/or the relevant subsidiary would prevail in any such dispute.
Furthermore, even if the Company and/or the relevant subsidiary does prevail, it would be subject to the cost and
administrative burden associated with such dispute.
As discussed in Item 1.—Business—Regulatory Matters—Environmental and Land Use Regulations, in the

United States there presently is no federal legislation establishing mandatory GHG emission reduction programs.
In 2010, the Company’s subsidiaries operated businesses which had total approximate CO2 emissions of
77.2 million metric tonnes (ownership adjusted). Approximately 40 million metric tonnes of the 77.2 million
metric tonnes were emitted in the United States (both figures ownership adjusted). Approximately 11.3 million
metric tonnes were emitted in United States states participating in the RGGI. We believe that legislative or
regulatory actions, if enacted, may require a material increase in capital expenditures at our subsidiaries.
In the future the actual impact on our subsidiaries’ capital expenditures from any potential federal program
to regulate and reduce GHG emissions, if enacted, and the state and regional programs developed or in the
process of development, or any EPA regulation of GHG emissions, will depend on a number of factors, including
among others, the GHG reductions required under any such legislation or regulations, the cost of emissions
reduction equipment, the price and availability of offsets, the extent to which our subsidiaries would be entitled
to receive GHG emission allowances without having to purchase them, the quantity of allowances which our
subsidiaries would have to purchase, the price of allowances, and our subsidiaries’ ability to recover or pass-
through costs incurred to comply with any legislative or regulatory requirements that are ultimately imposed and
the use of market-based compliance options such as cap-and-trade programs.
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Income Taxes
We recognized tax expense of $307 million for the year ended December 31, 2010, while our cash payments
for income taxes, net of refunds, totaled $698 million. The difference resulted primarily from impairment charges
recognized at certain subsidiaries in the United States, for which we recognized a benefit in our domestic tax
provision. As a result, global cash tax payments exceeded the consolidated tax provision.
Consolidated Cash Flows

At December 31, 2010, cash and cash equivalents increased $772 million from December 31, 2009 to
$2.6 billion. The increase in cash and cash equivalents was due to $3.5 billion of cash provided by operating
activities, $2.0 billion of cash used for investing activities, $706 million of cash used for financing activities and
the favorable effect of foreign currency exchange rates on cash of $8 million.
At December 31, 2009, cash and cash equivalents increased $917 million from December 31, 2008 to $1.8
billion. The increase in cash and cash equivalents was due to $2.2 billion of cash provided by operating activities,
$1.9 billion of cash used for investing activities, $610 million of cash provided by financing activities and the
favorable effect of foreign currency exchange rates on cash of $22 million.
$ Change
2010 2009 2008 2010 vs. 2009 2009 vs. 2008
(in millions)
Net cash provided by operating activities . . . . . . . . . . . . . $3,510 $2,202 $2,160 $ 1,308 $ 42
Net cash used in investing activities . . . . . . . . . . . . . . . . . $2,040 $1,917 $3,581 $ 123 $(1,664)
Net cash (used in) provided by financing activities . . . . . . $ (706) $ 610 $ 362 $(1,316) $ 248
Operating Activities
Net cash provided by operating activities increased $1.3 billion, or 59%, to $3.5 billion during 2010
compared to 2009. This net increase was primarily due to the following:
• an increase of $837 million at our Latin American Utilities businesses due to increased tax payments in
2009 associated with a tax amnesty program of $326 million, higher working capital requirements
during 2009 related to payments on the settlement of swap agreements of $65 million and in 2010, a
$50 million decrease in employer contributions to pension plans and lower payments for contingencies;
• an increase of $215 million at our Latin American Generation businesses due to the higher gross
margin in 2010 combined with improved working capital mainly as a result of higher collections of
value added taxes and accounts receivable;
• an increase of $99 million at Masinloc in the Philippines due to higher gross margin; and
• an increase of $58 million as a result of our consolidation of Cartagena in 2010 and the acquisition of
Ballylumford in Northern Ireland.

• a decrease of $136 million in operating cash flows from discontinued operations of businesses sold in
2010 compared to 2009. In 2010, net cash provided by operating activities of businesses sold was $33
million and will not recur in 2011.
In 2010 the increase in net cash provided by operating activities at our Latin American Utilities businesses
included several items such as the tax amnesty program and settlement of swap agreements, as described above,
that are not expected to recur. In addition, 2010 net cash provided by operating activities benefited from the one
time cash savings related to the utilization of tax credits received as a result of the REFIS program. As such, the
Company does not expect the trend of an increase in net cash provided by operating activities realized in 2010 to
continue in 2011.
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Investing Activities
Net cash used for investing activities increased $123 million, or 6%, to $2.0 billion during 2010 compared
to 2009. This increase was largely attributable to the following:
• an increase in the purchase of short-term investments of $1.6 billion during 2010 compared to 2009
primarily due to the investment of cash proceeds from debt issuances at our Brazilian subsidiaries and
the purchase of time deposits at Gener in 2010. Purchases were offset by an increase in sales of short-
term investments of $1.3 billion mainly due to the use of proceeds from investments for the repayment
of debt instruments and dividend distributions at our Brazilian subsidiaries and the sales of time
deposits at Gener;
• an increase of $406 million in funding requirements for restricted cash balances during 2010 compared
to 2009. During 2010, $104 million of funds were transferred to restricted cash balances while during
2009, $302 million was transferred out of restricted cash;
• an increase of $254 million for acquisitions, net of cash acquired, primarily due to $138 million related
to the acquisition of Ballylumford in Northern Ireland, $65 million related to the purchase of three
wind development pipelines in the U.K. and Poland, $35 million related to the acquisition of JHRH,
and $11 million related to the buyout of noncontrolling interests at Changuinola;
• an increase of $241 million in debt service reserves during 2010 compared to 2009. During 2010, $56
million of funds were transferred to debt service reserves while during 2009, $185 million was utilized
for debt maturities; partially offset by
• an increase of $593 million in proceeds from the sale of businesses primarily due to proceeds of $226
million related to the sale in October 2010 of Ras Laffan in Qatar, $170 million related to the sale in
August 2010 of Barka in Oman, the final settlement proceeds of $99 million received in January 2010
from the termination of a management agreement with Kazakhmys in Kazakhstan related to Ekibastuz
and Maikuben which were sold in May 2008, and the net proceeds from the sale of Lal Pir and Pak Gen
in Pakistan in June 2010 of $100 million;
• a decrease of $210 million in capital expenditures to $2.3 billion primarily due to a decrease in
expenditures of $298 million at Gener and $250 million at our Europe Wind generation projects. These
decreases were partially offset by a net increase in capital expenditures of $261 million at our Brazilian
subsidiaries, $66 million at Maritza in Bulgaria, and $16 million at our U.S. Wind generation projects;
and
• an increase of $132 million in proceeds related to the repayment of the loan receivable from a wind
development project in Brazil. There were no proceeds from loan repayments during 2009.
Financing Activities
Net cash used for financing activities increased $1,316 million, or 216%, to $706 million during 2010
compared to net cash provided by financing activities of $610 million during 2009. This increase was primarily
attributable to the following:
• a $1.7 billion increase in repayments of recourse and non-recourse debt, predominately due to increases
of $760 million of recourse debt repayments at the Parent Company, $706 million at our Brazilian
businesses, $279 million at our businesses in the Dominican Republic, $55 million at Masinloc in the
Philippines, $44 million at New York, $40 million at our European wind businesses, $31 million at
Chigen and $30 million at Cartagena, partially offset by decreases of $132 million at IPALCO and
$115 at Armenia Mountain;
• a $560 million decrease in proceeds from issuances of recourse and non-recourse debt primarily due to
decreases of $503 million of recourse debt at the Parent Company, $286 million at Gener, $209 million
at Armenia Mountain, $208 million at our European wind businesses, $123 million at Sonel and $122
million at IPALCO, partially offset by increases of $604 million at our Brazilian businesses and $294
million at our businesses in the Dominican Republic;
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• a $399 million increase in distributions to noncontrolling interests, primarily due to $245 million at our
Brazilian businesses, $84 million related to distributions in connection with the sale of discontinued
operations and $69 million at Armenia Mountain;
• a $190 million decrease in contributions from noncontrolling interests primarily due to a reduction of
$117 million at Armenia Mountain and $71 million at Gener; and
• a $99 million acquisition of treasury stock.

• a $1.6 billion issuance of common stock net of transaction costs to CIC; and
• a $67 million increase in net borrowings under revolving credit facilities primarily due to decreased
repayments attributable to discontinued operations sold in 2010.
Contractual Obligations
A summary of our contractual obligations, commitments and other liabilities as of December 31, 2010 is
presented in the table below (in millions):
Less than 5 years Footnote
Contractual Obligations Total 1 year 1-3 years 4-5 years and more Other Reference(10)
Debt Obligations(1) . . . . . . . . . . . . . . . . . . . . . . . $ 19,653 $ 3,026 $ 1,591 $ 3,963 $11,073 $— 10

Interest Payments on Long-Term Debt(2) . . . . . . 9,533 1,358 2,531 2,055 3,589 — n/a
Capital Lease Obligations(3) . . . . . . . . . . . . . . . . 206 17 26 21 142 — 11
Operating Lease Obligations(4) . . . . . . . . . . . . . . 919 56 111 104 648 — 11
Sale/Leaseback Obligations(5) . . . . . . . . . . . . . . 664 43 90 94 437 — 11
Electricity Obligations(6) . . . . . . . . . . . . . . . . . . 52,160 3,055 6,118 5,211 37,776 — 11
Fuel Obligations(7) . . . . . . . . . . . . . . . . . . . . . . . 8,871 1,587 1,887 1,006 4,391 — 11
Other Purchase Obligations(8) . . . . . . . . . . . . . . . 21,040 1,628 2,603 2,752 14,057 — 11
Other Long-term Liabilities Reflected on AES’s
Consolidated Balance Sheet under
GAAP(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 625 4 93 94 298 136 n/a
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $113,671 $10,774 $15,050 $15,300 $72,411 $136
(1) Includes recourse and non-recourse debt presented on the Consolidated Balance Sheet. Non-recourse debt
borrowings are not a direct obligation of AES, the Parent Company. Recourse debt represents the direct
borrowings of AES, the Parent Company. See Note 10—Debt to the Consolidated Financial Statements
included in Item 8 of this Form 10-K which provides additional disclosure regarding these obligations.
These amounts exclude capital lease obligations which are included in the capital lease category, see
(3) below.
(2) Interest payments are estimated based on final maturity dates of debt securities outstanding at December 31,
2010 and do not reflect anticipated future refinancing, early redemptions or new debt issuances. Variable
rate interest obligations are estimated based on rates as of December 31, 2010.
(3) Several AES subsidiaries have leases for operating and office equipment and vehicles that are classified as
capital leases within Property, Plant and Equipment. Minimum contractual obligations include $127 million
of imputed interest.
(4) The Company was obligated under long-term noncancelable operating leases, primarily for office rental and
site leases. These amounts exclude amounts related to the sale/leaseback discussed below in item (5).
(5) Sale/Leaseback Obligations—represent a sales/leaseback with operating lease treatment at one of our
New York subsidiaries.
(6) Operating subsidiaries of the Company have entered into contracts for the purchase of electricity from third
parties.
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(7) Operating subsidiaries of the Company have entered into fuel purchase contracts subject to termination only
in certain limited circumstances.
(8) Amounts relate to other contractual obligations where the Company has an enforceable and legally binding
agreement to purchase goods or services that specifies all significant terms, including: quantity, pricing, and
approximate timing. These amounts include planned capital expenditures that are contractually obligated.
(9) These amounts do not include current liabilities on the Consolidated Balance Sheet except for the current
portion of uncertain tax obligations. Noncurrent uncertain tax obligations are reflected in the “Other”
column of the table above as the Company is not able to reasonably estimate the timing of the future
payments. In addition, the amounts do not include: (1) regulatory liabilities (See Note 9—Regulatory Assets
and Liabilities), (2) contingencies (See Note 12—Contingencies), (3) pension and other post retirement
employee benefit liabilities (see Note 13—Benefit Plans) or (4) any taxes (See Note 20—Income Taxes)
except for uncertain tax obligations, as the Company is not able to reasonably estimate the timing of future
payments. See the indicated notes to the Consolidated Financial Statements included in Item 8 of this
Form 10-K for additional information on the items excluded. Derivatives (See Note 6—Derivative
Instruments and Hedging Activities) and incentive compensation are excluded as the Company is not able to
reasonably estimate the timing or amount of the future payments.
(10) For further information see the note referenced below in Item 8.—Financial Statements and Supplementary
Data.
Parent Company Liquidity

The following discussion of “Parent Company Liquidity” has been included because we believe it is a useful
measure of the liquidity available to The AES Corporation, or the Parent Company, given the non-recourse
nature of most of our indebtedness. Parent Company liquidity as outlined below is a non-GAAP measure and
should not be construed as an alternative to cash and cash equivalents which are determined in accordance with
GAAP, as a measure of liquidity. Cash and cash equivalents are disclosed in the Consolidated Statements of Cash
Flows and the Parent Only Unconsolidated Statements of Cash Flows in Schedule I of this Form 10-K. Parent
Company liquidity may differ from similarly titled measures used by other companies. The principal sources of
liquidity at the Parent Company level are:
• dividends and other distributions from our subsidiaries, including refinancing proceeds;
• proceeds from debt and equity financings at the Parent Company level, including availability under our
credit facilities; and
• proceeds from asset sales.
Cash requirements at the Parent Company level are primarily to fund:

• interest;
• principal repayments of debt;
• acquisitions;
• construction commitments;
• other equity commitments;
• equity repurchases;
• taxes; and
• Parent Company overhead and development costs.
The Company defines Parent Company Liquidity as cash available to the Parent Company plus available
borrowings under existing credit facilities. The cash held at qualified holding companies represents cash sent to
subsidiaries of the Company domiciled outside of the U.S. Such subsidiaries have no contractual restrictions on
their ability to send cash to the Parent Company. Parent Company Liquidity is reconciled to its most directly
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comparable U.S. GAAP financial measure, “cash and cash equivalents” at December 31, 2010 and 2009 as
follows:
Parent Company Liquidity 2010 2009
(in millions)
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,554 $ 1,782
Less: Cash and cash equivalents at subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,432) (1,105)
Parent and qualified holding companies cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . 1,122 677
Commitments under Parent credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 785
Less: Borrowings and letters of credit under the credit facilities . . . . . . . . . . . . . . . . . . . . (85) (204)
Borrowings available under Parent credit facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 715 581
Total Parent Company Liquidity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,837 $ 1,258
Recourse Debt Transactions:

During 2010, the Company redeemed $690 million aggregate principal of its 8.75% Second Priority Senior
Secured Notes due 2013 (“the 2013 Notes”). The 2013 Notes were redeemed at a redemption price equal to
101.458% of the principal amount redeemed. The Company recognized a pre-tax loss on the redemption of the
2013 Notes of $15 million for the year ended December 31, 2010, which is included in “Other expense” in the
accompanying Consolidated Statement of Operations.
On July 29, 2010, the Company entered into an Amendment No. 2 (the “Amendment No. 2”) to the Fourth
Amended and Restated Credit and Reimbursement Agreement, dated as of July 29, 2008, among the Company,
various subsidiary guarantors and various lending institutions (the “Existing Credit Agreement”) that amends and
restates the Existing Credit Agreement (as so amended and restated by the Amendment No. 2, the “Fifth
Amended and Restated Credit Agreement”). The Fifth Amended and Restated Credit Agreement adjusted the
terms and conditions of the Existing Credit Agreement, including the following changes:
• the aggregate commitment for the revolving credit loan facility was increased to $800 million;
• the final maturity date of the revolving credit loan facility was extended to January 29, 2015;
• there were changes to the facility fee applicable to the revolving credit loan facility;
• the interest rate margin applicable to the revolving credit loan facility is now based on the credit rating
assigned to the loans under the credit agreement, with pricing currently at LIBOR + 3.00%;
• there is an undrawn fee of 0.625% per annum;
• the Company may incur a combination of additional term loan and revolver commitments so long as
total term loan and revolver commitments (including those currently outstanding) do not exceed $1.4
billion; and
• the negative pledge (i.e., a cap on first lien debt) of $3.0 billion.
Recourse Debt:
Our recourse debt at year-end was approximately $4.6 billion and $5.5 billion in 2010 and 2009, respectively.
The following table sets forth our Parent Company contingent contractual obligations as of December 31, 2010:
Maximum
Exposure Range
Number of for Each
Contingent contractual obligations Amount Agreements Agreement
(in millions) (in millions)
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $415 24 <$1 - $62
Letters of credit under the senior secured credit facility . . . . . . . . . . . . . 85 30 <$1 - $26
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500 54
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As of December 31, 2010, the Company had $66 million of commitments to invest in subsidiaries under
construction and to purchase related equipment, excluding $26 million of such obligations already included in the
letters of credit discussed above. The Company expects to fund these net investment commitments in 2011. The
exact payment schedules will be dictated by the construction milestones. We expect to fund these commitments
from a combination of current liquidity and internally generated Parent Company cash flow.
We have a diverse portfolio of performance related contingent contractual obligations. These obligations are
designed to cover potential risks and only require payment if certain targets are not met or certain contingencies
occur. The risks associated with these obligations include change of control, construction cost overruns,
subsidiary default, political risk, tax indemnities, spot market power prices, sponsor support and liquidated
damages under power sales agreements for projects in development, in operation and under construction. While
we do not expect that we will be required to fund any material amounts under these contingent contractual
obligations during 2011 or beyond, many of the events which would give rise to such obligations are beyond our
control. We can provide no assurance that we will be able to fund our obligations under these contingent
contractual obligations if we are required to make substantial payments thereunder.
While we believe that our sources of liquidity will be adequate to meet our needs for the foreseeable future,
this belief is based on a number of material assumptions, including, without limitation, assumptions about our
ability to access the capital markets (see Key Trends and Uncertainties and Global Economic Conditions), the
operating and financial performance of our subsidiaries, currency exchange rates, power market pool prices, and
the ability of our subsidiaries to pay dividends. In addition, our subsidiaries’ ability to declare and pay cash
dividends to us (at the Parent Company level) is subject to certain limitations contained in loans, governmental
provisions and other agreements. We can provide no assurance that these sources will be available when needed
or that the actual cash requirements will not be greater than anticipated. We have met our interim needs for
shorter-term and working capital financing at the Parent Company level with our senior secured credit facility.
See Item 1A.—Risk Factors, “The AES Corporation is a holding company and its ability to make payments on its
outstanding indebtedness, including its public debt securities, is dependent upon the receipt of funds from its
subsidiaries by way of dividends, fees, interest, loans or otherwise.” of this Form 10-K.
Various debt instruments at the Parent Company level, including our senior secured credit facility, contain
certain restrictive covenants. The covenants provide for, among other items:
• limitations on other indebtedness, liens, investments and guarantees;
• limitations on dividends, stock repurchases and other equity transactions;
• restrictions and limitations on mergers and acquisitions, sales of assets, leases, transactions with
affiliates and off-balance sheet and derivative arrangements;
• maintenance of certain financial ratios; and
• financial and other reporting requirements.
As of December 31, 2010, we were in compliance with these covenants at the Parent Company level.
Non-Recourse Debt:
While the lenders under our non-recourse debt financings generally do not have direct recourse to the Parent
Company, defaults thereunder can still have important consequences for our results of operations and liquidity,
including, without limitation:
• reducing our cash flows as the subsidiary will typically be prohibited from distributing cash to the
Parent Company during the time period of any default;
• triggering our obligation to make payments under any financial guarantee, letter of credit or other
credit support we have provided to or on behalf of such subsidiary;
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• causing us to record a loss in the event the lender forecloses on the assets; and
• triggering defaults in our outstanding debt at the Parent Company.
For example, our senior secured credit facilities and outstanding debt securities at the Parent Company
include events of default for certain bankruptcy related events involving material subsidiaries. In addition, our
revolving credit agreement at the Parent Company includes events of default related to payment defaults and
accelerations of outstanding debt of material subsidiaries.
Some of our subsidiaries are currently in default with respect to all or a portion of their outstanding
indebtedness. The total non-recourse debt classified as current in the accompanying Consolidated Balance Sheets
amounts to $2.6 billion. The portion of current debt related to such defaults was $1.4 billion at December 31,
2010, all of which was non-recourse debt related to four subsidiaries—Maritza, Sonel, Kelanitissa and Aixi.
None of the subsidiaries that are currently in default are subsidiaries that met the applicable definition of
materiality under AES’ corporate debt agreements as of December 31, 2010 in order for such defaults to trigger
an event of default or permit acceleration under such indebtedness. However, as a result of additional
dispositions of assets, other significant reductions in asset carrying values or other matters in the future that may
impact our financial position and results of operations or the financial position of the individual subsidiary, it is
possible that one or more of these subsidiaries could fall within the definition of a “material subsidiary” and
thereby upon an acceleration trigger an event of default and possible acceleration of the indebtedness under the
AES Parent Company’s outstanding debt securities.
Off-Balance Sheet Arrangements

In May 1999, our subsidiary in New York acquired six electric generating plants from New York State
Electric and Gas. Concurrently, the subsidiary sold two of the plants to unrelated third parties for $666 million
and simultaneously entered into a leasing arrangement with the unrelated parties. In May 2007, the subsidiary
purchased 37.5% interest in a trust estate that holds the leased plants. Future minimum lease commitments under
the lease agreement have been reduced by the subsidiary’s interest in the plants. We have accounted for this sale/
leaseback transaction as an operating lease. We amortize the off-balance sheet lease obligation reduced by the
subsidiary interest over the life of the lease, which resulted in the recognition of expense of $34 million for each
of the years ended December 31, 2010, 2009 and 2008, respectively. AES is not subject to any additional
liabilities or contingencies if the arrangement terminates and we believe that the dissolution of the off-balance
sheet arrangement would have minimal effects on our operating cash flows. The terms of Eastern Energy’s credit
facility include restrictive covenants such as the maintenance of certain coverage ratios. Historically, the plants
have satisfied the restrictive covenants of the credit facility; however as a result of the continued pressure on
energy prices and negative forecasted operating cash flow and losses previously discussed under Key Trends and
Uncertainties, management does not believe that cash flow from operations, together with amounts available
under existing credit facilities, will be sufficient to cover expected capital requirements over the terms of the
leases. Management is exploring revenue enhancements as well as reviewing cost and debt structure for
meaningful reductions that could be implemented in the future; however, in the event of a default Eastern Energy
could be subject to full payment of the outstanding principal, accrued interest and termination costs under its
lease arrangements and existing $200 million credit facility. In addition, the subsidiary lessor could be subject to
full payment of the outstanding principal, accrued interest and make-whole premiums under its bond indenture.
Also, a default by Eastern Energy or its related subsidiaries could result in the loss of AES’s ownership interest
in Eastern Energy and related subsidiaries. See Note 11—Commitments to the Consolidated Financial Statements
included in Item 8 of this Form 10-K for further discussion of this transaction.
164
ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Overview Regarding Market Risks
We are a global company in the power generation and distribution businesses. We own and/or operate
power plants to generate and sell power to wholesale customers. We also own and/or operate utilities to
distribute, transmit and sell electricity to end-user customers. Our primary market risk exposure is to the price of
commodities particularly electricity, oil, natural gas, coal and environmental credits. We operate in multiple
countries and as such are subject to volatility in exchange rates at the subsidiary level and between our functional
currency, the U.S. Dollar, and currencies of the countries in which we operate. We are also exposed to interest
rate fluctuations due to our issuance of debt and related financial instruments.
These disclosures set forth in this Item 7A are based upon a number of assumptions, and actual impacts to
the Company may not follow the assumptions made by the Company. The safe harbor provided in Section 27A
of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 shall apply to the
disclosures contained in this Item 7A. For further information regarding market risk, see Item 1A.—Risk Factors,
“Our financial position and results of operations may fluctuate significantly due to fluctuations in currency
exchange rates experienced at our foreign operations”, “Our businesses may incur substantial costs and
liabilities and be exposed to price volatility as a result of risks associated with the wholesale electricity markets,
which could have a material adverse effect on our financial performance” and “We may not be adequately
hedged against our exposure to changes in commodity prices or interest rates” in this Form 10-K.
Commodity Price Risk

We are exposed to the impact of market fluctuations in the price of electricity, fuels and environmental
credits. Although we primarily consist of businesses with long-term contracts or retail sales concessions, a
portion of our current and expected future revenues are derived from businesses without significant long-term
revenue or supply contracts. These businesses subject our operational results to the volatility of prices for
electricity, fuels and environmental credits in competitive markets. We employ risk management strategies to
hedge our financial performance against the effects of fluctuations in energy commodity prices. The
implementation of these strategies can involve the use of physical and financial commodity contracts, futures,
swaps and options.
When hedging the output of our generation assets, we have PPAs or other hedging instruments that lock in
the spread per MWh between variable costs, such as fuel, to generate a unit of electricity and the price at which
the electricity can be sold. The portion of our sales and purchases that are not subject to such agreements will be
exposed to commodity price risk.
AES businesses will see variance in variable margin performance as global commodity prices shift. For
2011, including operations from the Company’s merchant generation assets in New York, we project pre-tax
earnings exposure would be approximately $10 million for a $10/barrel move in oil, $110 million for a
$1/MMBTU move in natural gas, and $50 million for a $10/ton shift in coal prices. Excluding New York, we
project approximately $35 million for a $1/MMBTU move in natural gas and $35 million for a $10/ton shift in
coal prices. The decrease in oil exposure from $15 million on December 31, 2009 is primarily due to higher
hedge levels at some businesses and lower hedging of fuel costs at our Hungarian facility where fuel cost is
indexed to oil partially offset by higher exposure at Gener due to the commissioning of new power facilities. The
increase in natural gas exposure from $50 million on December 31, 2009 is primarily due to lower hedging levels
at Eastern Energy, due to dark spread compression, and our Kilroot facility, which is no longer operating under a
long-term PPA. The increase in coal exposure from $20 million on December 31, 2009 arises primarily from the
lower hedge levels at Eastern Energy, Kilroot long-term PPA termination, Argentina pricing rules that limit the
ability to reflect coal price movement under some conditions, and inclusion of China due to a delay in energy
tariff resets intended to reflect changes in coal prices. These numbers have been produced by forecasting the
impact of a change in commodity price to spot power prices and power and fuel contracts held by each business.
Our estimates exclude correlation. For example, a decline in oil or natural gas prices can be accompanied by a
decline
165
in coal price if commodity prices are correlated. In aggregate, the Company’s downside exposure occurs with
lower oil, lower natural gas, and higher coal prices. Exposures at individual businesses will change as new
contracts or financial hedges are executed.
Commodity prices affect our businesses differently depending on the local market characteristics and risk
management strategies. Generation costs can be directly affected by movements in the price of natural gas, oil
and coal. Spot power prices and contract indexation provisions are affected by these same commodity price
movements. We have some natural offsets across our businesses such that low commodity prices may benefit
certain businesses and be a cost to others. Variance is not perfectly linear or symmetric. The sensitivities are
affected by a number of non-market, or indirect market, factors. Examples of these factors include hydrology,
energy market supply/demand balances, regional fuel supply issues, and regulatory interventions such as price
caps. Operational flexibility changes the shape of our sensitivities. For instance, power plants may reduce
dispatch in low market environments limiting downside exposure. Volume variation also affects our commodity
exposure. The volume sold under contracts or retail concessions can vary based on weather and economic
conditions resulting in a higher or lower volume of sales in spot markets. Thermal unit availability and hydrology
can affect the generation output available for sale and can affect the marginal unit setting power prices.
Our larger contributors to commodity risk include Eastern Energy and wholesale power sales from IPL in
North America; Gener, Argentina, the Dominican Republic and Panama in Latin America; Kilroot in Europe; and
Masinloc in Asia.
In North America, commodity risk is due to “dark spread” to the extent a portion of sales are un-hedged.
Given that natural gas-fired generators set power prices for many periods, higher natural gas prices expand
margins and higher coal prices cause a decline in margins. The positive impact on margins will be moderated if
natural gas-fired generators set the market price only during certain peak periods. IPL sells power at wholesale
once retail demand is served, so retail sales demand may affect commodity exposure.
In Chile, we own assets and have associated contracts in both the central and northern regions of the
country. Contracts tend to be long-term and indexed to fuel limiting commodity risk. Oil-fired generators set
power prices for some periods impacting spot power margins. Gener has been adding coal-fired generation to its
portfolio, increasing its exposure to dark spreads on un-hedged volumes. Gener also owns natural gas/diesel,
hydropower and biomass generation facilities.
In other Latin American markets, the businesses have commodity exposure on un-hedged volumes. In
Panama and Colombia, we own hydropower assets, so contracts are not indexed to fuel. In the Dominican
Republic, we own natural gas-fired and coal-fired assets, and both contract and spot prices may move with
commodity prices. In Argentina, prices are set according to government rules that result in commodity exposure
based on the spread between cost of coal-fired generation and oil-fired generation and other factors.
In Europe, our Kilroot facility’s long term PPA was terminated during the fourth quarter of 2010. The
commodity risk at our Kilroot business is due to “dark spread” to the extent sales are un-hedged. Natural
gas-fired generators set power prices for many periods, so higher natural gas prices expand margins and higher
coal prices cause a decline. The positive impact on margins will be moderated if natural gas-fired generators set
the market price only during certain peak periods.
Our Masinloc business in Asia is a coal-fired generation facility, which hedges its output through medium
term contracts that are indexed to fuel prices. Low oil prices may be a driver of margin compression since oil
affects spot power sale prices.
166
Foreign Exchange Rate Risk
In the normal course of business, we are exposed to foreign currency risk and other foreign operations risks
that arise from investments in foreign subsidiaries and affiliates. A key component of these risks stems from the
fact that some of our foreign subsidiaries and affiliates utilize currencies other than our consolidated reporting
currency, the U.S. Dollar. Additionally, certain of our foreign subsidiaries and affiliates have entered into
monetary obligations in the U.S. Dollar or currencies other than their own functional currencies. Primarily, we
are exposed to changes in the exchange rate between the U.S. Dollar and the following currencies: Argentine
Peso, Brazilian Real, British Pound, Cameroonian Franc, Chilean Peso, Colombian Peso, Euro, Kazakhstani
Tenge, Mexican Peso, and Philippine Peso. These subsidiaries and affiliates have attempted to limit potential
foreign exchange exposure by entering into revenue contracts that adjust to changes in foreign exchange rates.
We also use foreign currency forwards, swaps and options, where possible, to manage our risk related to certain
foreign currency fluctuations.
During 2010, we entered into hedges to partially mitigate the exposure of earnings translated into the
U.S. Dollar to foreign exchange volatility. As of December 31, 2010, assuming a 10% U.S. Dollar appreciation,
2011 pre-tax earnings attributable to foreign subsidiaries exposed to movements in the exchange rates of the
Brazilian Real, Chilean Peso, Philippine Peso and Euro (the earnings attributable to subsidiaries exposed to
Cameroonian Franc movements are included under Euro due to the fixed exchange rate of the Cameroonian
Franc to the Euro) relative to the U.S. Dollar are projected to be approximately $40 million, $15 million, $10
million, and $20 million, respectively, and represent the majority of the Company’s pre-tax earnings exposure to
currency moves. The increases relative to December 31, 2009 figures, which were $35 million, $10 million, $5
million and $10 million for the Brazilian Real, Chilean Peso, Philippine Peso and Euro, respectively, are
primarily driven by forecasted increases in the foreign currency denominated pre-tax earnings notably
attributable to businesses in Brazil, Chile, the Philippines and Europe. These numbers have been produced by
applying a one-time 10% U.S. Dollar appreciation to forecasted exposed pre-tax earnings for 2011 coming from
subsidiaries where the local currency is either not the U.S. Dollar or is not exhibiting the characteristics of a peg
or managed float relative to the U.S. Dollar, net of the impact of outstanding hedges and holding all other
variables constant. The numbers presented above are net of any transactional gains/losses. These sensitivities
may change in the future as new hedges are executed or existing hedges unwound. Additionally, updates to the
forecasted pre-tax earnings exposed to foreign exchange risk may result in further modification.
Interest Rate Risks

We are exposed to risk resulting from changes in interest rates as a result of our issuance of variable and
fixed-rate debt, as well as interest rate swap, cap and floor and option agreements.
Decisions on the fixed-floating debt ratio are made to be consistent with the risk factors faced by individual
businesses or plants. Depending on whether a plant’s capacity payments or revenue stream is fixed or varies with
inflation, we partially hedge against interest rate fluctuations by arranging fixed-rate or variable-rate financing. In
certain cases, particularly for non-recourse financing, we execute interest rate swap, cap and floor agreements to
effectively fix or limit the interest rate exposure on the underlying financing.
As of December 31, 2010, the portfolio’s 2011 pre-tax earnings exposure (adjusted to reflect noncontrolling
interests) to a 100 basis point increase in Brazilian Real, British Pound, Colombian Peso, Euro, Philippine Peso,
Ukraine Hryvnia and U.S. Dollar interest rates would be approximately $25 million. This number is based on the
impact of a one-time, 100 basis point increase in interest rates on interest expense for Brazilian Real, British
Pound, Colombian Peso, Euro, Philippine Peso, Ukraine Hryvnia and U.S. Dollar-denominated debt, which is
primarily non-recourse financing. The numbers do not take into account the historical correlation between these
interest rates. This compares to $20 million as of December 31, 2009. The increase is driven by an increase in the
notional amount of floating rate debt in the portfolio.
167
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of The AES Corporation:

We have audited the accompanying consolidated balance sheets of The AES Corporation and subsidiaries as
of December 31, 2010 and December 31, 2009, and the related consolidated statements of operations,
stockholders’ equity and cash flows for each of the three years in the period ended December 31, 2010. Our
audits also included the financial statement schedules listed in the index at Item 15(a). These financial statements
and schedules are the responsibility of the Company’s management. Our responsibility is to express an opinion
on these financial statements and schedules based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether the financial statements are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by management, as well as evaluating
the overall financial statement presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements referred to above present fairly, in all material respects, the
consolidated financial position of The AES Corporation and subsidiaries at December 31, 2010 and 2009, and the
consolidated results of their operations and their cash flows for each of the three years in the period ended
December 31, 2010, in conformity with U.S. generally accepted accounting principles. Also, in our opinion, the
related financial statement schedules, when considered in relation to the basic financial statements taken as a
whole, present fairly, in all material respects, the information set forth therein.
As discussed in Note 1 to the consolidated financial statements, in 2010 The AES Corporation and
subsidiaries changed their method of accounting for the consolidation of variable interest entities with the
adoption of amendments to Financial Accounting Standards Board (“FASB”) Accounting Standards Codification
(“ASC”) 810, Consolidation, and their method of accounting for transfers and servicing of financial assets with
the adoption of the amendments to FASB ASC 860, Transfers and Servicing, both effective January 1, 2010.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), The AES Corporation’s internal control over financial reporting as of December 31, 2010, based
on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission and our report dated February 25, 2011 expressed an unqualified
opinion thereon.
/s/: Ernst & Young LLP
McLean, Virginia
February 25, 2011
168
THE AES CORPORATION
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 2010 AND 2009
2010 2009
(in millions, except share
and per share data)
ASSETS
CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,554 $ 1,782
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 574 407
Short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,730 1,648
Accounts receivable, net of allowance for doubtful accounts of $308 and $290, respectively . . . . . . . . . . . . . . . . . . . . . 2,362 2,118
Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 600 560
Receivable from affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27 24
Deferred income taxes—current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 306 210
Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 234 161
Other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,059 1,557
Current assets of discontinued and held for sale businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 320
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,446 8,787
NONCURRENT ASSETS
Property, Plant and Equipment: . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Land . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,128 1,111
Electric generation, distribution assets and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28,207 26,815
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,173) (8,774)
Construction in progress . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,459 4,644
Property, plant and equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,621 23,796
Other Assets:
Deferred financing costs, net of accumulated amortization of $295 and $293, respectively . . . . . . . . . . . . . . . . . . . . . . 376 377
Investments in and advances to affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,320 1,157
Debt service reserves and other deposits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 691 595
Goodwill . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,271 1,299
Other intangible assets, net of accumulated amortization of $160 and $223, respectively . . . . . . . . . . . . . . . . . . . . . . . . 516 510
Deferred income taxes—noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 646 587
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,624 1,551
Noncurrent assets of discontinued and held for sale businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 876
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,444 6,952
TOTAL ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,511 $39,535
LIABILITIES AND EQUITY
CURRENT LIABILITIES
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,060 $ 1,862
Accrued interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 269
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,700 2,331
Non-recourse debt—current, including $1,152 related to variable interest entities at December 31, 2010 . . . . . . . . . . . 2,577 1,718
Recourse debt—current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 463 214
Current liabilities of discontinued and held for sale businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 227
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,065 6,621
LONG-TERM LIABILITIES
Non-recourse debt—noncurrent, including $2,201 related to variable interest entities at December 31, 2010 . . . . . . . . 12,544 12,304
Recourse debt—noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,149 5,301
Deferred income taxes—noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 895 1,090
Pension and other post-retirement liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,522 1,322
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,863 3,146
Long-term liabilities of discontinued and held for sale businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 811
Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,973 23,974
Contingencies and Commitments (see Notes 12 and 11)
Cumulative preferred stock of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60 60
EQUITY
THE AES CORPORATION STOCKHOLDERS’ EQUITY
Common stock ($0.01 par value, 1,200,000,000 shares authorized; 804,894,313 issued and 787,607,240 outstanding
at December 31, 2010 and 677,214,493 issued and 667,679,913 outstanding at December 31, 2009) . . . . . . . . . . . . 8 7
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,444 6,868
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 650
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,383) (2,724)
Treasury stock, at cost (17,287,073 and 9,534,580 shares at December 31, 2010 and 2009, respectively) . . . . . . . . . . . (216) (126)
Total The AES Corporation stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,473 4,675
NONCONTROLLING INTERESTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,940 4,205
Total equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,413 8,880
TOTAL LIABILITIES AND EQUITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $40,511 $39,535
See Accompanying Notes to these Consolidated Financial Statements
169
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED DECEMBER 31, 2010, 2009, AND 2008
2010 2009 2008
Revenue:
Regulated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9,145 $ 7,816 $ 7,768
Non-Regulated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,502 6,138 7,429
Total revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16,647 13,954 15,197
Cost of Sales:
Regulated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6,718) (5,705) (5,564)
Non-Regulated . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,965) (4,816) (6,065)
Total cost of sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12,683) (10,521) (11,629)
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,964 3,433 3,568
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (392) (339) (368)
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,526) (1,485) (1,770)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 348 519
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (239) (111) (161)
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 465 375
Gain on sale of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 131 909
Loss on sale of subsidiary stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (31)
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21) (122) —
Asset impairment expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,221) (25) (175)
Foreign currency transaction gains (losses) on net monetary position . . . . . . . . . . . . . . . . . . (33) 33 (184)
Other non-operating expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (12) (15)
INCOME FROM CONTINUING OPERATIONS BEFORE TAXES AND EQUITY IN
EARNINGS OF AFFILIATES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,044 2,316 2,667
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (307) (599) (771)
Net equity in earnings of affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183 92 33
INCOME FROM CONTINUING OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 920 1,809 1,929
Income from operations of discontinued businesses, net of income tax expense of $2, $3
and $7, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 96 97
Gain (loss) from disposal of discontinued businesses, net of income tax expense of $132,
$— and $—, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 (150) 6
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,059 1,755 2,032
Noncontrolling interests:
Less: Income from continuing operations attributable to noncontrolling interests . . . . . . . . . (1,006) (1,099) (759)
Less: (Income) loss from discontinued operations attributable to noncontrolling interests . . (44) 2 (39)
Total net income attributable to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . (1,050) (1,097) (798)
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION . . . . . . . . . . . . . . . . . . . $ 9 $ 658 $ 1,234
BASIC EARNINGS (LOSS) PER SHARE:
Income (loss) from continuing operations attributable to The AES Corporation common
stockholders, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.11) $ 1.06 $ 1.75
Discontinued operations attributable to The AES Corporation common stockholders, net of
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.12 (0.07) 0.09
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.01 $ 0.99 $ 1.84
DILUTED EARNINGS (LOSS) PER SHARE:
Income (loss) from continuing operations attributable to The AES Corporation common
stockholders, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (0.11) $ 1.06 $ 1.73
Discontinued operations attributable to The AES Corporation common stockholders, net of
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.12 (0.08) 0.09
NET INCOME ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.01 $ 0.98 $ 1.82
AMOUNTS ATTRIBUTABLE TO THE AES CORPORATION COMMON
STOCKHOLDERS:
Income (loss) from continuing operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (86) $ 710 $ 1,170
Discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 95 (52) 64
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $ 658 $ 1,234
170
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
2010 2009 2008
(in millions)
OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,059 $ 1,755 $ 2,032
Adjustments to net income:
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,178 1,049 1,001
(Gain) loss from sale of investments and impairment expense . . . . . . . . . . . . . . . . . . . . . . . . . . 1,313 57 (712)
(Gain) loss on disposal and impairment write-down—discontinued operations . . . . . . . . . . . . . (209) 150 (7)
Provision for deferred taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (418) 15 160
Contingencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 (122) 52
(Gain) loss on the extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 (6) 56
Undistributed gain from sale of equity method investment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (106) — —
Noncontrolling interest of discontinued operations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (4)
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) (99) 127
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (98) 62 (451)
(Increase) decrease in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 (34) (83)
(Increase) decrease in prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . 430 138 (62)
(Increase) decrease in other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (248) (177) (467)
Increase (decrease) in accounts payable and accrued liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 136 (308) 260
Increase (decrease) in income taxes and other income tax payables, net . . . . . . . . . . . . . . . . . . . 166 88 226
Increase (decrease) in other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 (366) 32
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,510 2,202 2,160
INVESTING ACTIVITIES:
Capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,310) (2,520) (2,850)
Acquisitions—net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (254) — (1,135)
Proceeds from the sale of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 595 2 1,328
Proceeds from the sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 17 105
Sale of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,786 4,526 5,150
Purchase of short-term investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,795) (4,248) (5,469)
(Increase) decrease in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (104) 302 (295)
(Increase) decrease in debt service reserves and other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (56) 185 (100)
Affiliate advances and equity investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (97) (155) (240)
Proceeds from loan repayments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 132 — —
Loan advances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (173)
Other investing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40 (26) 98
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,040) (1,917) (3,581)
FINANCING ACTIVITIES:
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,567 — —
Borrowings (repayments) under the revolving credit facilities, net . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 11 298
Issuance of recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 503 625
Issuance of non-recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,940 1,997 2,158
Repayments of recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (914) (154) (1,037)
Repayments of non-recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,945) (1,008) (1,260)
Payments for deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (61) (91) (82)
Distributions to noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,245) (846) (597)
Contributions from noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 190 410
Financed capital expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23) (18) (47)
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99) — (143)
Other financing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4) 26 37
Net cash (used in) provided by financing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (706) 610 362
Effect of exchange rate changes on cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 22 (96)
Total increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 772 917 (1,155)
Cash and cash equivalents, beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,782 865 2,020
Cash and cash equivalents, ending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,554 $ 1,782 $ 865
SUPPLEMENTAL DISCLOSURES:
Cash payments for interest, net of amounts capitalized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,462 $ 1,395 $ 1,615
Cash payments for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 698 $ 484 $ 465
SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES:
Assets acquired in acquisition of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 1,097
Liabilities assumed in acquisition of subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 49
Assets acquired in noncash asset exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42 $ 111 $ 18
Assets disposed of in noncash asset exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $ — $ 4
171
THE AES CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY
THE AES CORPORATION STOCKHOLDERS

Retained Accumulated
Common Stock Treasury Stock Additional Earnings Other Consolidated
Paid-In (Accumulated Comprehensive Noncontrolling Comprehensive
Shares Amount Shares Amount Capital Deficit) Loss Interests Income
(in millions)
Balance at January 1, 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . 670.3 $ 7 — $— $6,776 $(1,241) $(2,378) $ 3,181
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — 1,234 — 798 $ 2,032
Foreign currency translation adjustment, net of income
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — (560) (492) (1,052)
Change in unfunded pensions obligation, net of income
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — (49) (100) (149)
Change in derivative fair value, including a reclassification
to earnings, net of income tax . . . . . . . . . . . . . . . . . . . . . . — — — — — — (31) (37) (68)
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . (1,269)
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . $ 763
Capital contributions from noncontrolling interests . . . . . . . — — — — — — — 619
Dividends declared to noncontrolling interests . . . . . . . . . . . — — — — — — — (574)
Disposition of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — (37)
Effect of pension measurement date change . . . . . . . . . . . . . — — — — — (1) — —
Acquisition of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . — — 10.7 (144) — — — —
Issuance of common stock under benefit plans and exercise
of stock options and warrants, net of income tax . . . . . . . . 3.2 — — — 30 — — —
Stock compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — 26 — — —
Balance at December 31, 2008 . . . . . . . . . . . . . . . . . . . . . . . 673.5 $ 7 10.7 $(144) $6,832 $ (8) $(3,018) $ 3,358
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — 658 — 1,097 $ 1,755
Change in fair value of available-for-sale securities, net of
income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 6 — 6
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 271 471 742
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — (23) (116) (139)
to earnings, net of income tax . . . . . . . . . . . . . . . . . . . . . . — — — — — — 40 33 73
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . 682
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,437
Dividends declared to noncontrolling interests . . . . . . . . . . . — — — — — — — (825)
Disposition of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — — (8)
Issuance of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1.2) 18 (20) — — —
of stock options and warrants, net of income tax . . . . . . . . 3.7 — — — 18 — — —
Balance at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . 677.2 $ 7 9.5 $(126) $6,868 $ 650 $(2,724) $ 4,205
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — 9 — 1,050 $ 1,059
Change in fair value of available-for-sale securities, net of
income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — (5) — (5)
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 383 85 468
tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — (22) (66) (88)
to earnings, net of income tax . . . . . . . . . . . . . . . . . . . . . . — — — — — — (120) (31) (151)
Other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . 224
Total comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,283
Cumulative effect of consolidation of entities under variable
interest entity accounting guidance . . . . . . . . . . . . . . . . . . — — — — — (47) (38) 15
Cumulative effect of deconsolidation of entities under
variable interest entity accounting guidance . . . . . . . . . . . — — — — — 1 — —
Dividends declared to noncontrolling interests . . . . . . . . . . . — — — — — — — (1,220)
Disposition of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — — 143 (138)
Acquisition of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . — — 8.4 (99) — — — —
Issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . 125.5 1 — — 1,566 — — —
of stock options and warrants, net of income tax . . . . . . . . 2.2 — (0.6) 9 9 — — —
Changes in the carrying amount of redeemable stock of
subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — 7 — —
Acquisition of subsidiary shares from noncontrolling
interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — (25) — — 5
Balance at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . . 804.9 $ 8 17.3 $(216) $8,444 $ 620 $(2,383) $ 3,940
172
THE AES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 2010, 2009, AND 2008
1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The AES Corporation is a holding company (the “Parent Company”) that through its subsidiaries and
affiliates, (collectively, “AES” or “the Company”) operates a geographically diversified portfolio of electricity
generation and distribution businesses. Generally, given this holding company structure, the liabilities of the
individual operating entities are not recourse to the parent and are isolated to the operating entities. Most of our
operating entities are structured as corporations, therefore limiting the liability of the shareholders. The structure
is generally the same regardless of whether a subsidiary is consolidated under a voting or variable interest model.
PRINCIPLES OF CONSOLIDATION—The Consolidated Financial Statements of the Company include

the accounts of The AES Corporation, its subsidiaries and controlled affiliates, and variable interest entities
(“VIEs”) of which the Company is the primary beneficiary. All intercompany transactions and balances have
been eliminated in consolidation.
A VIE is an entity (a) that has a total equity investment at risk that is not sufficient to finance its activities
without additional subordinated financial support or (b) where the group of equity holders does not have (i) the
ability to make significant decisions about the entity’s activities, (ii) the obligation to absorb the entity’s expected
losses or (iii) the right to receive the entity’s expected residual returns or (c) where the voting rights of some
equity holders are not proportional to their obligations to absorb expected losses, receive expected residual
returns, or both, and substantially all of the entity’s activities either involve or are conducted on behalf of an
investor that has disproportionately few voting rights.
Effective January 1, 2010, the Company prospectively adopted the new accounting guidance on the
consolidation of VIEs. The new guidance requires an entity to determine qualitatively, rather than quantitatively,
the primary beneficiary of a VIE. This determination is based on whether the entity has the power to direct the
activities that most significantly impact the economic performance of the VIE and the obligation to absorb losses
or the right to receive benefits of the VIE that could potentially be significant to the VIE. Other key changes
include: a requirement for the ongoing reconsideration of the primary beneficiary, the criteria used for
determining whether service provider or decision maker contracts are variable interests, the consideration of
kick-out and removal rights in determining whether an entity is a VIE, the types of events that trigger the
reassessment of whether an entity is a VIE and expansion of the disclosures previously required.
The determination of which party has the power to direct the activities that most significantly impact the
economic performance of the VIE could require significant judgment and assumptions. That determination
considers the purpose and design of the business, the risks that the business was designed to create and pass
along to other entities, the activities of the business that can be directed and which party can direct them, and the
expected relative impact of those activities on the economic performance of the business through its life. The
businesses for which significant judgment and assumptions were required were primarily certain generation
businesses who have power purchase agreements (“PPAs”) to sell energy exclusively or primarily to a
single counterparty for the term of those agreements. For these generation businesses, the counterparty has the
power to dispatch energy and, in some instances, to make decisions regarding the sale of excess energy. As such,
the counterparty has the power to direct certain activities that significantly impact the economic performance of
the business primarily through the cash flows and gross margin, if any, earned by the business from the sale of
energy to the counterparty and sometimes through the counterparty’s absorption of fuel price risk. However, the
counterparty usually does not have the power to direct any of the other activities that could significantly impact
the economic performance. These other activities include: daily operation and management, maintenance, repairs
and capital expenditures, plant expansion, decisions regarding the overall financing of ongoing operations and
budgets and, in some instances, decisions regarding the sale of excess energy. As such, AES has the power to
173
THE AES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS—(Continued)
DECEMBER 31, 2010, 2009, AND 2008
direct some activities of the business that significantly impact its economic performance, primarily through the
cash flows and gross margin earned from capacity payments received from being available to produce energy and
from the sale of energy to other entities (particularly during any period beyond the end of the power purchase
agreement). For these businesses, the determination as to which set of activities most significantly impact the
economic performance of the business requires significant judgment and the use of assumptions. The Company
concluded that the activities directed by the counterparty were less significant than those directed by AES.
The adoption of the new accounting guidance on the consolidation of VIEs resulted in the deconsolidation of
certain immaterial VIEs previously consolidated. Additionally, assets, liabilities and operating results of two of the
Company’s VIEs, previously accounted for under the equity method of accounting, were required to be
consolidated. Cartagena, a 71% owned generation business in Spain, and Cili, a 51% owned generation business in
China, were consolidated under the new guidance. This resulted in a cumulative effect adjustment of $47 million to
retained earnings as of January 1, 2010. The cumulative effect adjustment is primarily comprised of losses that were
not recognized while the equity method of accounting was suspended for Cartagena. The equity method of
accounting was suspended in December 2008 when the Company’s basis in its investment in Cartagena was
reduced to zero. As of December 31, 2010, total assets and total liabilities related to these VIEs were $850 million
and $919 million, respectively. In addition, revenue for the year ended December 31, 2010 included $416 million of
revenue from these VIEs. Prior period operating results of these VIEs are reflected in “Net equity in earnings of
affiliates” except for those prior periods during which the equity method of accounting was suspended.
USE OF ESTIMATES—The preparation of these consolidated financial statements in conformity with

accounting principles generally accepted in the United States of America (“U.S. GAAP”) requires the Company
to make estimates and assumptions that affect reported amounts of assets and liabilities and disclosures of
contingent assets and liabilities at the date of the consolidated financial statements, as well as the reported
amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.
Items subject to such estimates and assumptions include: the carrying value and estimated useful lives of long-
lived assets; impairment of goodwill, long-lived assets and equity method investments; valuation allowances for
receivables and deferred tax assets; the recoverability of deferred regulatory assets; the valuation of certain
financial instruments; the determination of noncontrolling interest using the hypothetical liquidation at book
value (“HLBV”) method for certain wind generation partnerships; pension liabilities; environmental liabilities;
and potential litigation claims and settlements.
DISCONTINUED OPERATIONS AND RECLASSIFICATIONS—A discontinued operation is a

component of the Company that either has been disposed of or is classified as held for sale. A component of the
Company comprises operations and cash flows that can be clearly distinguished, operationally and for financial
reporting purposes, from the rest of the Company. In accordance with the accounting standards on the
impairment or disposal of long-lived assets, the prior period Consolidated Financial Statements in this Form
10-K have been restated to reflect the businesses determined to be discontinued operations, as further discussed
in Note 21—Discontinued Operations and Held for Sale Businesses. The Company has reclassified certain of its
trade related payables from accrued and other liabilities to accounts payable within the Consolidated Financial
Statements to conform to current year presentation.
FAIR VALUE—Fair value, as defined in the fair value measurement accounting guidance, is the price that
would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date, or exit price. The Company applies the fair value measurement accounting
guidance for financial assets and liabilities to determine the fair value of short and long term investments in
marketable debt and equity securities, included in the consolidated balance sheet line items “Short-term
investments” and “Other assets (noncurrent),” derivative assets, included in “Other current assets” and “Other
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
assets (noncurrent)” and derivative liabilities, included in “Accrued and other liabilities (current)” and “Other
long-term liabilities.” The Company applies the fair value measurement guidance for nonfinancial assets upon
the acquisition of a business in accordance with the accounting guidance for business combinations or in
conjunction with the measurement of an impairment loss on an asset group or reporting unit under the accounting
guidance for the impairment of long-lived assets or goodwill.
The fair value measurement accounting guidance requires that the Company make assumptions that market
participants would use in pricing an asset or liability based on the best information available. These factors
include nonperformance risk (the risk that the obligation will not be fulfilled) and credit risk of the reporting
entity (for liabilities) and of the counterparty (for assets). The fair value measurement guidance prohibits the
inclusion of transaction costs and any adjustments for blockage factors in determining the instruments’ fair value.
The principal or most advantageous market should be considered from the perspective of the reporting entity.
Fair value, where available, is based on observable quoted market prices. Where observable prices or inputs
are not available, several valuation models and techniques are applied. These models and techniques attempt to
maximize the use of observable inputs and minimize the use of unobservable inputs. The process involves
varying levels of management judgment, the degree of which is dependent on the price transparency of the
instruments or market and the instruments’ complexity.
To increase consistency and enhance disclosure of the fair value of financial instruments, the fair value
measurement accounting guidance creates a fair value hierarchy to prioritize the inputs used to measure fair value
into three categories. An asset or liability’s level within the fair value hierarchy is based on the lowest level of
input significant to the fair value measurement, where Level 1 is the highest and Level 3 is the lowest. The three
levels are defined as follows:
Level 1—unadjusted quoted prices in active markets accessible by the reporting entity for identical assets or
liabilities. Active markets are those in which transactions for the asset or liability occur with sufficient frequency
and volume to provide pricing information on an ongoing basis.
Level 2—pricing inputs other than quoted market prices included in Level 1 which are based on observable
market data, that are directly or indirectly observable for substantially the full term of the asset or liability. These
include quoted market prices for similar assets or liabilities, quoted market prices for identical or similar assets in
markets that are not active, adjusted quoted market prices, inputs from observable data such as interest rate and
yield curves, volatilities or default rates observable at commonly quoted intervals or inputs derived from
observable market data by correlation or other means. The fair value of most over-the-counter derivatives derived
from internal valuation models using market inputs and most investments in marketable debt securities qualify as
Level 2.
Level 3—pricing inputs that are unobservable, or less observable, from objective sources. Unobservable
inputs are only used to the extent observable inputs are not available. These inputs maintain the concept of an
exit price from the perspective of a market participant and should reflect assumptions of other market
participants. An entity should consider all market participant assumptions that are available without unreasonable
cost and effort. These are given the lowest priority and are generally used in internally developed methodologies
to generate management’s best estimate of the fair value when no observable market data is available. The fair
value of the Company’s reporting units determined using a discounted cash flows valuation model for goodwill
impairment assessment and the fair value of the Company’s long-lived asset groups determined using a
discounted cash flows valuation model for the long-lived asset impairment assessments qualify as Level 3.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Any transfers between the fair value hierarchy levels are recognized at the end of the reporting period.
CASH AND CASH EQUIVALENTS—The Company considers unrestricted cash on hand, deposits in
banks, certificates of deposit and short-term marketable securities, with an original or remaining maturity at the
date of acquisition of three months or less, to be cash and cash equivalents. The carrying amount of such balances
approximate fair value.
RESTRICTED CASH—Restricted cash includes cash and cash equivalents which are restricted as to
withdrawal or usage. The nature of restrictions includes restrictions imposed by financing agreements such as
security deposits kept as collateral, debt service reserves, maintenance reserves and others, as well as restrictions
imposed by long-term PPAs.
INVESTMENTS IN MARKETABLE SECURITIES—Short-term investments in marketable debt and

equity securities consist of securities with original or remaining maturities in excess of three months but less than
one year. The Company’s marketable investments are primarily certificates of deposit, government debt
securities and money market funds.
Marketable debt securities that the Company has both the positive intent and ability to hold to maturity are
classified as held-to-maturity and are carried at amortized cost. Other marketable securities that the Company
does not intend to hold to maturity are classified as available-for-sale or trading and are carried at fair value.
Available-for-sale investments are marked-to-market at the end of each reporting period, with unrealized holding
gains or losses, which represent changes in the market value of the investment, reflected in accumulated other
comprehensive income (“AOCI”), a separate component of stockholders’ equity. In measuring the other-than-
temporary impairment of debt securities, the Company identifies two components: 1) the amount representing the
credit loss, which is recognized as “other non-operating expense” in the Consolidated Statements of Operations;
and 2) the amount related to other factors, which is recognized in AOCI unless there is a plan to sell the security,
in which case it would be recognized in earnings. The amount recognized in AOCI for held-to-maturity debt
securities is then amortized over the remaining life of the security.
Investments classified as trading are marked-to-market on a periodic basis through the Consolidated
Statements of Operations. Interest and dividends on investments are reported in interest income and other
income, respectively. Gains and losses on sales of investments are determined using the specific identification
method.
See Note 4—Fair Value and the Company’s fair value policy for additional discussion regarding the
determination of the fair value of the Company’s investments in marketable debt and equity securities.
ACCOUNTS AND NOTES RECEIVABLE AND ALLOWANCE FOR DOUBTFUL ACCOUNTS—

Accounts and Notes receivable are carried at amortized cost. The Company periodically assesses the
collectability of accounts receivable considering factors such as specific evaluation of collectability, historical
collection experience, the age of accounts receivable and other currently available evidence of the collectability,
and records an allowance for doubtful accounts for the estimated uncollectable amount as appropriate. Certain of
our businesses charge interest on accounts receivable either under contractual terms or where charging interest is
a customary business practice. In such cases, interest income is recognized on an accrual basis. In situations
where the collection of interest is uncertain, interest income is recognized as cash is received. Individual accounts
and notes receivable are written off when they are no longer deemed collectible. Included in “Noncurrent Other
Assets” are long-term financing receivables of $151 million, primarily with certain Latin American governmental
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
bodies. These receivables have contractual maturities of greater than one year and are being collected in
installments. Of the total $151 million, amounts of $81 million and $55 million, respectively, relate to our
businesses in Argentina and the Dominican Republic. The remaining amount relates to our distribution
businesses in Brazil.
INVENTORY—Inventory primarily consists of coal, fuel oil and other raw materials used to generate
power, and spare parts and supplies used to maintain power generation and distribution facilities. Inventory is
carried at lower of cost or market. Cost is the sum of the purchase price and incidental expenditures and charges
incurred to bring the inventory to its existing condition or location. Cost is determined under the first-in, first-out
(“FIFO”), average cost or specific identification method. Generally, cost is reduced to market value if the market
value of inventory has declined and it is probable that the utility of inventory, in its disposal in the ordinary
course of business, will not be recovered through revenue earned from the generation of power.
LONG-LIVED ASSETS—Long-lived assets include property, plant and equipment, assets under capital
leases and intangible assets subject to amortization (i.e., finite-lived intangible assets).
Property, plant and equipment

Property, plant and equipment are stated at cost, net of accumulated depreciation. The cost of renewals and
improvements that extend the useful life of property, plant and equipment are capitalized.
Construction progress payments, engineering costs, insurance costs, salaries, interest and other costs directly
relating to construction in progress are capitalized during the construction period, provided the completion of the
project is deemed probable, or expensed at the time the Company determines that development of a particular
project is no longer probable. The continued capitalization of such costs is subject to ongoing risks related to
successful completion, including those related to government approvals, site identification, financing,
construction permitting and contract compliance. Construction in progress balances are transferred to electric
generation and distribution assets when an asset group is ready for its intended use. Government subsidies are
recorded as a reduction to property, plant and equipment and reflected in cash flows from investing activities.
Depreciation, after consideration of salvage value and asset retirement obligations, is computed primarily
using the straight-line method over the estimated useful lives of the assets, which are determined on a composite
or component basis. Maintenance and repairs are charged to expense as incurred. Capital spare parts, including
rotable spare parts, are included in electric generation and distribution assets. If the spare part is considered a
component, it is depreciated over its useful life after the part is placed in service. If the spare part is deemed part
of a composite asset, the part is depreciated over the composite useful life even when being held as a spare part.
Intangible Assets Subject to Amortization

Finite-lived intangible assets are amortized over their useful lives which range from 1- 89 years. The
Company accounts for purchased emission allowances as intangible assets and records an expense when utilized
or sold. Granted allowances are valued at zero.
Impairment of Long-lived Assets
The Company evaluates the impairment of long-lived assets (asset group) using internal projections of
undiscounted cash flows when circumstances indicate that the carrying amount of such assets may not be
recoverable or the assets meet the held for sale criteria under the relevant accounting standards. Events or
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
changes in circumstances that may necessitate a recoverability evaluation may include but are not limited to:
changes to or the passage of new legislation, changes in the relative pricing of wholesale electricity, anticipated
demand and/or cost of fuel. The carrying amount of a long-lived asset (asset group) may not be recoverable if it
exceeds the sum of undiscounted cash flows expected to result from the use and eventual disposal of the asset
(asset group). In such cases, fair value of the long-lived asset (asset group) is determined in accordance with the
fair value measurement accounting guidance. The excess of carrying amount over fair value, if any, is recognized
as an impairment expense. For regulated assets, an impairment expense could be reduced by the establishment of
a regulatory asset, if recovery through approved rates was probable. For non-regulated assets, impairment is
recognized as an expense against earnings.
DEFERRED FINANCING COSTS—Financing costs are deferred and amortized over the related
financing period using the effective interest method or the straight-line method when it does not differ materially
from the effective interest method. Make-whole payments in connection with early debt retirements are classified
as cash flows used in investing activities.
EQUITY METHOD INVESTMENTS—Investments in entities over which the Company has the ability to
exercise significant influence, but not control, are accounted for using the equity method of accounting and
reported in “Investments in and advances to affiliates” on the Consolidated Balance Sheets. In accordance with
the accounting guidance for equity method investments, the Company periodically assesses the recoverability of
its equity method investments. If an identified event or change in circumstances requires an impairment
evaluation, management assesses the fair value based on valuation methodologies, including discounted cash
flows, estimates of sale proceeds and external appraisals, as appropriate. The difference between the carrying
amount of the equity method investment and its estimated fair value is recognized as impairment when the loss in
value is deemed other-than-temporary and included in “Other non-operating expense” on the Consolidated
Statements of Operations.
In accordance with the accounting standards for equity method investments, the Company discontinues the
application of the equity method when an investment is reduced to zero and the Company is not otherwise
committed to provide further financial support to the investee. The Company resumes the application of the
equity method if the investee subsequently reports net income to the extent that the Company’s share of such net
income equals the share of net losses not recognized during the period in which the equity method of accounting
was suspended.
GOODWILL AND INDEFINITE-LIVED INTANGIBLE ASSETS—In accordance with the accounting

guidance on goodwill and other intangible assets, the Company recognizes goodwill as an asset representing the
future economic benefits arising from other assets acquired in a business combination that are not individually
identified and separately recognized. The Company evaluates goodwill and indefinite-lived intangible assets for
impairment on an annual basis and whenever events or changes in circumstances necessitate an evaluation for
impairment. The Company’s annual impairment testing date is October 1st.
Goodwill:
The Company evaluates goodwill impairment at the reporting unit level, which is an operating segment, as
defined in the segment reporting accounting guidance, or one level below an operating segment, a component. In
determining its reporting units, the Company starts with its segment reporting structure. Operating segments are
identified and then analyzed to identify components (usually businesses) which make up these operating
segments. Two or more components are combined into a single reporting unit if they share the economic
similarity criteria prescribed by the accounting guidance. Assets and liabilities are allocated to a reporting unit if
178
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
the assets will be employed by or a liability relates to the operations of a reporting unit or would be considered
by a market participant in determining its fair value. Goodwill resulting from an acquisition is assigned to the
reporting units that are expected to benefit from the synergies of the acquisition. Generally, each AES business
constitutes a reporting unit.
Goodwill impairment evaluation is performed in two steps. In Step 1, the carrying amount of a reporting
unit is compared to its fair value and if the fair value exceeds the carrying amount, Step 2 is unnecessary. If the
carrying amount exceeds the reporting unit’s fair value, this could indicate potential impairment and Step 2 of the
goodwill evaluation process is required to determine if goodwill is impaired and to measure the amount of
impairment loss to recognize, if any. In determining the implied fair value of goodwill for impairment
measurement, the accounting guidance requires measuring all assets and liabilities, including unrecognized assets
and liabilities, at fair value, as would be done in a business combination. When a Step 2 analysis is required to be
completed, the fair value of individual assets and liabilities is determined using valuations (which in some cases
may be based in part on third party valuation reports), or other observable sources of fair value, as appropriate.
An impairment loss is recognized to the extent the carrying amount of goodwill exceeds its implied fair value,
not to exceed the carrying value of goodwill.
Most of the Company’s reporting units are not publicly traded. Therefore, the Company estimates the fair
value of its reporting units under the fair value measurement accounting guidance which requires making
assumptions that a market participant would make in a hypothetical sale transaction at the testing date. The fair
value of a reporting unit is estimated using internal budgets and forecasts, adjusted for any market participants’
assumptions and discounted at the rate of return required by a market participant. The Company considers both
market and income-based approaches to determine a range of fair value, but typically concludes that the value
derived using an income-based approach is more representative of fair value due to the lack of direct market
comparables. The Company does use market data to corroborate and determine the reasonableness of the fair
value derived from the income-based discounted cash flow analysis.
Indefinite-lived Intangible Assets:

The Company’s indefinite-lived intangible assets include items such as land use rights, easements, and
concessions. These are tested for impairment on an annual basis or whenever events or changes in circumstances
necessitate an evaluation for impairment in accordance with applicable accounting guidance for indefinite-lived
intangible assets.
INCOME TAXES—Deferred tax assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statement carrying amounts of the existing assets and liabilities,
and their respective income tax bases. The Company establishes a valuation allowance when it is more likely
than not that all or a portion of a deferred tax asset will not be realized. The Company’s tax positions are
evaluated under a more-likely-than-not recognition threshold and measurement analysis before they are
recognized for financial statement reporting.
Uncertain tax positions have been classified as noncurrent income tax liabilities unless expected to be paid
within one year. The Company’s policy for interest and penalties related to income tax exposures is to recognize
interest and penalties as a component of the provision for income taxes in the Consolidated Statements of
Operations.
PENSION AND OTHER POSTRETIREMENT PLANS—In accordance with the accounting guidance
on defined benefit pension and other postretirement plans, the Company recognizes in its Consolidated Balance
Sheets an asset or liability reflecting the funded status of pension and other postretirement plans with current year
179
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
changes in the funded status recognized in AOCI. All plan assets are recorded at fair value. AES follows the
measurement date provisions of the accounting guidance, which require a year-end measurement date of plan
assets and obligations for all defined benefit plans.
NONCONTROLLING INTERESTS—In accordance with the accounting guidance on noncontrolling

interests, such interests are classified as a separate component of equity in the Consolidated Balance Sheets and
Statements of Changes in Equity. Additionally, net income and comprehensive income attributable to
noncontrolling interests are reflected separately from consolidated net income and comprehensive income in the
Consolidated Statements of Operations and Statements of Changes in Equity. Any change in ownership of a
subsidiary while the controlling financial interest is retained is accounted for as an equity transaction between the
controlling and noncontrolling interests. Losses continue to be attributed to the noncontrolling interests, even
when the noncontrolling interests’ basis has been reduced to zero.
Although in general, the noncontrolling ownership interest in earnings is calculated based on ownership
percentage, certain of the Company’s wind businesses use the HLBV method in consolidation. HLBV uses a
balance sheet approach, which measures the Company’s equity in income or loss by calculating the change in the
amount of net worth the partners are legally able to claim based on a hypothetical liquidation of the entity at the
beginning of a reporting period compared to the end of that period. This method is used in AES Wind Generation
partnerships which contain agreements designating different allocations of value among investors, where the
allocations change in form or percentage over the life of the partnership.
ACCOUNTS PAYABLE AND OTHER ACCRUED LIABILITIES—Accounts payable consists of

amounts due to trade creditors related to the Company’s core business operations. The nature of these payables
include amounts owed to vendors and suppliers for items such as energy purchased for resale, fuel, maintenance,
inventory and other raw materials. Other accrued liabilities include items such as income taxes, regulatory
liabilities, legal contingencies and employee related costs including payroll, benefits and related taxes.
ASSET RETIREMENT OBLIGATIONS—In accordance with the accounting standards for asset
retirement obligations, the Company records the fair value of the liability for a legal obligation to retire an asset
in the period in which the obligation is incurred. When a new liability is recognized, the Company capitalizes the
costs of the liability by increasing the carrying amount of the related long-lived asset. The liability is accreted to
its present value each period and the capitalized cost is depreciated over the useful life of the related asset. Upon
settlement of the obligation, the Company eliminates the liability and, based on the actual cost to retire, may
incur a gain or loss.
GUARANTOR ACCOUNTING—In accordance with the accounting standards on guarantees, at the

inception of a guarantee, the Company records the fair value of a guarantee as a liability, with the offset
dependent on the circumstances under which the guarantee was issued.
TRANSFER OF FINANCIAL ASSETS—Effective January 1, 2010, the Company prospectively adopted

the new accounting guidance on transfers of financial assets, which among other things: removes the concept of a
qualifying special purpose entity; introduces the concept of participating interests and specifies that in order to
qualify for sale accounting a partial transfer of a financial asset or a group of financial assets should meet the
definition of a participating interest; clarifies that an entity should consider all arrangements made
contemporaneously with or in contemplation of a transfer and requires enhanced disclosures to provide financial
statement users with greater transparency about transfers of financial assets and a transferor’s continuing
involvement with transfers of financial assets accounted for as sales. Upon adoption on January 1, 2010, the
Company recognized $40 million as accounts receivable and as an associated secured borrowing on its
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Consolidated Balance Sheet; both of which have since increased to $50 million as of December 31, 2010, as
additional interests in receivables have been sold. While securitizing these accounts receivable through IPL
Funding, a special purpose entity, IPL, the Company’s integrated utility in Indianapolis, had previously
recognized the transaction as a sale, but had not recognized the accounts receivable and secured borrowing on its
balance sheet. Under the facility, interests in these accounts receivable are sold, on a revolving basis, to unrelated
parties (the Purchasers) up to the lesser of $50 million or an amount determinable under the facility agreement.
The Purchasers assume the risk of collection on the interest sold without recourse to IPL, which retains the
servicing responsibilities for the interest sold. While no direct recourse to IPL exists, IPL risks loss in the event
collections are not sufficient to allow for full recovery of the retained interests. No servicing asset or liability is
recorded since the servicing fee paid to IPL approximates a market rate. Under the new accounting guidance, the
retained interest in these securitized accounts receivable does not meet the definition of a participating interest,
thereby requiring the Company to recognize on its Consolidated Balance Sheet the portion transferred and the
proceeds received as accounts receivable and a secured borrowing, respectively.
FOREIGN CURRENCY TRANSLATION—A business’ functional currency is the currency of the

primary economic environment in which the business operates and is generally the currency in which the
business generates and expends cash. Subsidiaries and affiliates whose functional currency is a currency other
than the U.S. Dollar translate their assets and liabilities into U.S. Dollars at the current exchange rates in effect at
the end of the fiscal period. The revenue and expense accounts of such subsidiaries and affiliates are translated
into U.S. Dollars at the average exchange rates that prevailed during the period. Translation adjustments are
included in AOCI. Gains and losses on intercompany foreign currency transactions that are long-term in nature
and which the Company does not intend to settle in the foreseeable future, are also recognized in AOCI. Gains
and losses that arise from exchange rate fluctuations on transactions denominated in a currency other than the
functional currency are included in determining net income.
REVENUE RECOGNITION—Revenue from Utilities is classified as regulated on the Consolidated

Statements of Operations. Revenue from the sale of energy is recognized in the period during which the sale
occurs. The calculation of revenue earned but not yet billed is based on the number of days not billed in the
month, the estimated amount of energy delivered during those days and the estimated average price per customer
class for that month. Differences between actual and estimated unbilled revenue are usually immaterial. Revenue
from the Generation business is classified as non-regulated and is recognized based upon output delivered and
capacity provided, at rates as specified under contract terms or prevailing market rates. The Company has
businesses where it makes sales and purchases of power to and from Independent System Operators (“ISOs”) and
Regional Transmission Organizations (“RTOs”). In those instances, the Company accounts for these transactions
on a net hourly basis because the transactions are settled on a net hourly basis. Revenue is recorded net of any
taxes assessed on and collected from customers, which are remitted to the governmental authorities.
SHARE-BASED COMPENSATION—The Company grants share-based compensation in the form of

stock options and restricted stock units. The Company accounts for stock-based compensation plans under the
accounting guidance on stock-based compensation, which requires entities to recognize compensation costs
relating to share-based payments in their financial statements. That cost is measured on the grant date based on
the fair value of the equity or liability instrument issued and is expensed on a straight-line basis over the requisite
service period, net of estimated forfeitures. Currently, the Company uses a Black-Scholes option pricing model to
estimate the fair value of stock options granted to its employees.
GENERAL AND ADMINISTRATIVE EXPENSES—General and administrative expenses include

corporate and other expenses related to corporate staff functions and initiatives, primarily executive management,
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
finance, legal, human resources and information systems, which are not directly allocable to our business
segments. Additionally, all costs associated with business development efforts are classified as general and
administrative expenses.
REGULATORY ASSETS AND LIABILITIES—The Company accounts for certain of its regulated
operations in accordance with the accounting standards on regulated operations. As a result, AES records assets
and liabilities that result from the regulated ratemaking process that are not recognized under GAAP for
non-regulated entities. Regulatory assets generally represent incurred costs that have been deferred due to the
probability of future recovery in customer rates. Regulatory liabilities generally represent obligations to make
refunds to customers. Management continually assesses whether the regulatory assets are probable of future
recovery by considering factors such as applicable regulatory changes, recent rate orders applicable to other
regulated entities and the status of any pending or potential deregulation legislation. If future recovery of costs
previously deferred ceases to be probable, the asset write-offs are recognized in continuing operations.
DERIVATIVES AND HEDGING ACTIVITIES—Derivatives primarily consist of interest rate swaps,

cross currency swaps, foreign currency instruments, and commodity and embedded derivatives. The Company
enters into various derivative transactions in order to hedge its exposure to certain market risks. AES primarily
uses derivative instruments to manage its interest rate, foreign currency and commodity exposures. The Company
does not enter into derivative transactions for trading purposes.
Under the accounting standards for derivatives and hedging, the Company recognizes all contracts that meet
the definition of a derivative, except those designated as normal purchase or normal sale at inception, as either
assets or liabilities in the Consolidated Balance Sheets and measures those instruments at fair value. Changes in
the fair value of derivatives are recognized in earnings unless specific hedge criteria are met. Gains and losses
related to derivative instruments that qualify as hedges are recognized in the same category as generated by the
underlying asset or liability. Gains or losses on derivatives that do not qualify for hedge accounting are
recognized as interest expense for interest rate and cross currency derivatives, foreign currency transaction gains
or losses for foreign currency derivatives, and non-regulated revenue or non-regulated cost of sales for
commodity derivatives.
The accounting standards for derivatives and hedging enable companies to designate qualifying derivatives
as hedging instruments based on the exposure being hedged. These hedge designations include fair value hedges
and cash flow hedges. Changes in the fair value of a derivative that is highly effective, designated and qualifies
as a fair value hedge are recognized in earnings as offsets to the changes in fair value of the exposure being
hedged. The Company has no fair value hedges at this time. Changes in the fair value of a derivative that is
highly effective, designated and qualifies as a cash flow hedge are deferred in AOCI and are recognized into
earnings as the hedged transactions affect earnings. Any ineffectiveness is recognized in earnings immediately.
The ineffective portion is recognized as interest expense for interest rate and cross currency hedges, foreign
currency transaction gains or losses for foreign currency hedges, and non-regulated revenue or non-regulated cost
of sales for commodity hedges. For all hedge contracts, the Company maintains formal documentation of the
hedge and effectiveness testing in accordance with the accounting standards for derivatives and hedging. If AES
determines that the derivative is not highly effective as a hedge, hedge accounting will be discontinued
prospectively.
For cash flow hedges of forecasted transactions, AES estimates the future cash flows of the forecasted
transactions and evaluates the probability of the occurrence and timing of such transactions. Changes in
conditions or the occurrence of unforeseen events could require discontinuance of hedge accounting or could
affect the timing of the reclassification of gains or losses on cash flow hedges from AOCI into earnings.
182
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The Company has elected not to offset net derivative positions in the financial statements. Accordingly, the
Company does not offset such derivative positions against the fair value of amounts (or amounts that
approximate fair value) recognized for the right to reclaim cash collateral (a receivable) or the obligation to
return cash collateral (a payable) under master netting arrangements.
See Note 4—Fair Value and the Company’s fair value policy for additional discussion regarding the
determination of the fair value of the Company’s derivative assets and liabilities.
Accounting Pronouncements Issued But Not Yet Effective

The following accounting standards have been issued, but as of December 31, 2010 are not yet effective for
and have not been adopted by AES.
Accounting Standards Update (“ASU”) No. 2010-28, Intangibles—Goodwill and Other (Topic 350), “When to
Perform Step 2 of the Goodwill Impairment Test for Reporting Units with Zero or Negative Carrying
Amounts”
In December 2010, the FASB issued ASU No. 2010-28, which amends the accounting guidance related to
goodwill. The amendments in ASU No. 2010-28 modify Step 1 of the goodwill impairment test for reporting
units with zero or negative carrying amounts. For those reporting units, an entity is required to perform Step 2 of
the goodwill impairment test if it is more likely than not that a goodwill impairment exists, eliminating an
entity’s ability to assert that a reporting unit is not required to perform Step 2 because the carrying amount of the
reporting unit is zero or negative despite the existence of qualitative factors that indicate the goodwill is more
likely than not impaired. In determining whether it is more likely than not that a goodwill impairment exists, an
entity should consider whether there are any adverse qualitative factors indicating that an impairment may exist.
ASU No. 2010-28 is effective for fiscal years, and interim periods within those years, beginning after
December 15, 2010, or January 1, 2011 for AES. Early adoption is prohibited. The adoption is not expected to
have a material impact on the Company’s financial position, results of operations or cash flows.
2. INVENTORY
As of December 31, 2010, 77% of the Company’s inventory was valued using average cost, 21% was
determined using the FIFO method and the remaining inventory was valued using the specific identification
method. The following table summarizes our inventory balances as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Coal, fuel oil and other raw materials . . . . . . . . . . . . . . . . . . . . . . . $296 $293
Spare parts and supplies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 304 267
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $600 $560
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
3. PROPERTY, PLANT & EQUIPMENT

The following table summarizes the components of the electric generation and distribution assets and other
property, plant and equipment with their estimated useful lives:
Estimated December 31,

Useful Life 2010 2009
(in millions)
Electric generation and distribution facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 62 yrs. $24,400 $23,484
Other buildings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 50 yrs. 2,215 1,926
Furniture, fixtures and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 - 31 yrs. 729 685
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 - 50 yrs. 863 720
Total electric generation and distribution assets and other . . . . . . . . . . . . . . . . . 28,207 26,815
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9,173) (8,774)
Net electric generation and distribution assets and other(1) . . . . . . . . . . . . . . . . . $19,034 $18,041
(1) Net electric generation and distribution assets and other related to Lal Pir, Pak Gen, Barka and Ras Laffan of
$848 million as of December 31, 2009 were excluded from the table above and were included in the
noncurrent assets of discontinued and held for sale businesses.
The amounts as of December 31, 2010 in the table above are stated net of impairment losses recognized in
2010 as further discussed in Note 19—Impairment Expense.
The following table summarizes interest capitalized during development and construction on qualifying
assets for the years ended December 31, 2010, 2009 and 2008:
December 31,
2010 2009 2008
(in millions)
Interest capitalized during development and construction . . . . . . . . $193 $187 $176
Recoveries of liquidated damages from construction delays and government subsidies are reflected as a
reduction in the related projects’ construction costs. Approximately $12.2 billion of property, plant and
equipment, net of accumulated depreciation, was mortgaged, pledged or subject to liens as of December 31,
2010.
Depreciation expense, including the amortization of assets recorded under capital leases, was $1.1 billion,
$980 million and $928 million for the years ended December 31, 2010, 2009 and 2008, respectively.
Net electric generation and distribution assets and other include unamortized internal use software costs of
$170 million and $182 million as of December 31, 2010 and 2009, respectively. Amortization expense associated
with software costs was $52 million, $48 million and $41 million for the years ended December 31, 2010, 2009
and 2008.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes regulated and non-regulated generation and distribution property, plant and
equipment and accumulated depreciation as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Regulated assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,488 $11,744
Regulated accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5,123) (4,830)
Regulated generation, distribution assets, and other, net . . . . . . . . . . . . . . . . . . . 7,365 6,914
Non-regulated assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15,719 15,071
Non-regulated accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (4,050) (3,944)
Non-regulated generation, distribution assets, and other, net . . . . . . . . . . . . . . . . 11,669 11,127
Net electric generation and distribution assets, and other . . . . . . . . . . . . . . . . . . . $19,034 $18,041
The following table summarizes the amounts recognized, which were related to asset retirement obligations,
for the years ended December 31, 2010 and 2009:
2010 2009
(in millions)
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $101 $ 70
Additional liabilities incurred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 17
Liabilities settled . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (1)
Accretion expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 5
Change in estimated cash flows . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 10
Translation adjustments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) —
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $129 $101
The Company’s asset retirement obligations covered by the relevant guidance primarily include active ash
landfills, water treatment basins and the removal or dismantlement of certain plant and equipment. The fair value
of legally restricted assets for purposes of settling asset retirement obligations was $12 million and $0 at
December 31, 2010 and 2009, respectively.
4. FAIR VALUE
The fair value of current financial assets and liabilities, debt service reserves and other deposits approximate
their reported carrying amounts. The fair value of non-recourse debt is estimated differently based upon the type
of loan. For variable rate loans, carrying value approximates fair value. For fixed rate loans, the fair value is
estimated using quoted market prices or discounted cash flow analyses. See Note 10—Debt for additional
information on the fair value and carrying value of debt. The fair value of interest rate swap, cap and floor
agreements, foreign currency forwards, swaps and options, and energy derivatives is the estimated net amount
that the Company would receive or pay to sell or transfer the agreements as of the balance sheet date.
The estimated fair values of the Company’s assets and liabilities have been determined using available
market information. By virtue of these amounts being estimates and based on hypothetical transactions to sell
assets or transfer liabilities, the use of different market assumptions and/or estimation methodologies may have a
material effect on the estimated fair value amounts.
185
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes the carrying and fair value of certain of the Company’s financial assets and
liabilities as of December 31, 2010 and 2009:
December 31,
2010 2009
Carrying Fair Carrying Fair
Amount Value Amount Value
(in millions)
Assets
Marketable securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,772 $ 1,772 $ 1,691 $ 1,691
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 125 141 141
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,897 $ 1,897 $ 1,832 $ 1,832
Liabilities
Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,733 $20,339 $19,537 $20,008
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424 424 310 310
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $20,157 $20,763 $19,847 $20,318
Valuation Techniques:
The fair value measurement accounting guidance describes three main approaches to measuring the fair
value: (1) market approach; (2) income approach and (3) cost approach. The market approach uses prices and
other relevant information generated from market transactions involving identical or comparable assets or
liabilities. The income approach often uses valuation techniques to convert future amounts to a single present
value amount. The measurement is based on current market expectations of return on those future amounts. The
cost approach is based on the amount that would currently be required to replace an asset. The Company
measures its investments and derivatives at fair value on a recurring basis. Additionally, in connection with
annual or event-driven impairment evaluations, certain nonfinancial assets and liabilities are measured at fair
value on a nonrecurring basis. These include long-lived tangible assets (i.e., property, plant and equipment),
goodwill and intangible assets (e.g., sales concessions, land use rights and emissions allowances etc). In general,
the Company determines the fair value of investments using the market approach and of derivatives using the
income approach. In the nonrecurring measurements of nonfinancial assets and liabilities, all three approaches
are considered; however, fair value generated by the income approach is often selected.
Investments
The Company’s investments measured at fair value primarily consist of marketable debt and equity
securities. Equity securities are measured at fair value using quoted market prices. Debt securities primarily
consist of unsecured debentures, certificates of deposit and government debt securities held by our Brazilian
subsidiaries. Returns and pricing on these instruments are generally indexed to the CDI (Brazilian equivalent to
London Inter Bank Offered Rate (“LIBOR”), a benchmark interest rate widely used by banks in the money
market), or Selic (overnight borrowing rate) rates in Brazil. Fair value is determined from comparisons of market
data obtained for similar assets and is considered Level 2 in the fair value hierarchy. For more detail regarding
the fair value of investments see Note 5—Investments in Marketable Securities.
186
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Derivatives
When deemed appropriate, the Company manages its risk from interest and foreign currency exchange rate
and commodity price fluctuations through the use of financial and physical derivative instruments. The
Company’s derivatives are primarily interest rate swaps to hedge non-recourse debt to establish a fixed rate on
variable rate debt, foreign exchange instruments to hedge against currency fluctuations, commodity derivatives to
hedge against commodity price fluctuations and embedded derivatives associated with commodity contracts. The
Company’s subsidiaries are counterparties to various over-the-counter derivatives, which include interest rate
swaps and options, foreign currency options and forwards and commodity swaps. In addition, the Company’s
subsidiaries are counterparties to certain PPAs and fuel supply agreements that are derivatives or include
embedded derivatives.
For the derivatives where there is a standard industry valuation model, the Company uses that model to
estimate the fair value. For the derivatives (such the PPAs and fuel supply agreements that are derivatives or
include embedded derivatives) where there is not a standard industry valuation model, the Company has created
internal valuation models to estimate the fair value, using observable data to the extent available. For all
derivatives, the income approach is used, which consists of forecasting future cash flows based on contractual
notional amounts and applicable and available market data as of the valuation date. The following are among the
most common market data inputs used in the income approach: volatilities, spot and forward benchmark interest
rates (such as LIBOR and Euro Inter Bank Offered Rate (“EURIBOR”)), foreign exchange rates and commodity
prices. Forward rates and prices are generally obtained from published information provided by pricing services
for an instrument with the same duration as the derivative instrument being valued. In situations where
significant inputs are not observable, the Company uses relevant techniques to best estimate the inputs, such as
regression analysis, Monte Carlo simulation or prices for similarly traded instruments available in the market.
For each derivative, the income approach is used to estimate the cash flows over the remaining term of the
contract. Those cash flows are then discounted using the relevant spot benchmark interest rate (such as LIBOR or
EURIBOR) plus a spread that reflects the credit or nonperformance risk. This risk is estimated by the Company
using credit spreads and risk premiums that are observable in the market, whenever possible, or estimated
borrowing costs based on bank quotes, industry publications and/or information on financing closed on similar
projects. To the extent that management can estimate the fair value of these assets or liabilities without the use of
significant unobservable inputs, these derivatives are classified as Level 2.
In certain instances, the published forward rates or prices may not extend through the remaining term of the
contract and management must make assumptions to extrapolate the curve, which necessitates the use of
unobservable inputs, such as proxy commodity prices or historical settlements to forecast forward prices. In
addition, in certain instances, there may not be third party data readily available which requires the use of
unobservable inputs. Similarly, in certain instances, the spread that reflects the credit or nonperformance risk is
unobservable. The fair value hierarchy of an asset or a liability is based on the Level of significance of input
assumptions. An input assumption is considered significant if it affects the fair value by at least 10%. Assets and
liabilities are transferred to Level 3 when the use of unobservable inputs becomes significant. Similarly, when the
use of unobservable input becomes insignificant for Level 3 assets and liabilities, they are transferred to Level 2.
Transfers in and out of Level 3 are determined as of the end of the reporting period and are from and to
Level 2. The Company has not had any Level 1 derivatives so there have not been any transfers between Levels 1
and 2.
187
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Nonfinancial assets and liabilities

For nonrecurring measurements derived using the income approach, fair value is determined using valuation
models based on the principles of discounted cash flows (“DCF”). The income approach is most often used in the
impairment evaluation of long-lived tangible assets, goodwill and intangible assets. The Company has developed
internal valuation models for such valuations; however, an independent valuation firm may be engaged in certain
situations. In such situations, the independent valuation firm largely uses DCF valuation models as the primary
measure of fair value though other valuation approaches are also considered. A few examples of input
assumptions to such valuations include macroeconomic factors such as growth rates, industry demand, inflation,
exchange rates, power prices and commodity prices. Whenever possible, the Company attempts to obtain market
observable data to develop input assumptions. Where the use of market observable data is limited or not possible
for certain input assumptions, the Company develops its own estimates of such assumptions using a variety of
techniques such as regression analysis and extrapolations.
For nonrecurring measurements derived using the market approach, recent market transactions involving the
sale of identical or similar assets are considered. The use of this approach is limited because it is often difficult to
find sale transactions of identical or similar assets. This approach is used in the impairment evaluations of certain
intangible assets. Otherwise, it is used to corroborate the fair value determined under the income approach.
For nonrecurring measurements derived using the cost approach, fair value is typically determined using the
replacement cost approach. Under this approach, the depreciated replacement cost of assets is determined by first
determining the current replacement cost of assets and then applying the remaining useful lives percentages to
such cost. Further adjustments for economic and functional obsolescence are made to the depreciated
replacement cost. This approach involves a considerable amount of judgment which is why its use is limited to
the measurement of a few long-lived tangible assets. Like the market approach, this approach is also used to
corroborate the fair value determined under the income approach. For the year ended December 31, 2010, the
Company did not measure any nonfinancial assets under the cost approach.
Fair Value Considerations:

In determining fair value, the Company considers the source of observable market data inputs, liquidity of
the instrument, the credit risk of the counterparty and the risk of the Company’s nonperformance. The conditions
and criteria used to assess these factors are:
Sources of market assumptions:

The Company derives most of its market assumptions from market efficient data sources (e.g., Bloomberg
and Platt’s). In some cases, where market data is not readily available, management uses comparable market
sources and empirical evidence to derive market assumptions to determine the fair value.
Market liquidity:
The Company evaluates market liquidity based on whether the financial or physical instrument, or the
underlying asset, is traded in an active or inactive market. An active market exists if the prices are fully
transparent to market participants, can be measured by market bid and ask quotes, the market has a relatively
large proportion of trading volume as compared to the Company’s current trading volume and the market has a
significant number of market participants that will allow the market to rapidly absorb the quantity of the assets
traded without significantly affecting the market price. Other factors the Company considers when determining
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
whether a market is active or inactive include the presence of government or regulatory control over pricing that
could make it difficult to establish a market based price when entering into a transaction.
Nonperformance risk:
Nonperformance risk refers to the risk that the obligation will not be fulfilled and affects the value at which
a liability is transferred or an asset is sold. Nonperformance risk includes, but may not be limited to, the
Company or counterparty’s credit and settlement risk. Nonperformance risk adjustments are dependent on credit
spreads, letters of credit, collateral, other arrangements available and the nature of master netting arrangements.
The Company and its subsidiaries are parties to various interest rate swaps and options; foreign currency options
and forwards; and derivatives and embedded derivatives which subject the Company to nonperformance risk.
The financial and physical instruments held at the subsidiary Level are generally non-recourse to the Parent
Company.
Nonperformance risk on the investments held by the Company is incorporated in the investment’s exit price
that is derived from quoted market data that is used to mark the investment to fair value.
The Company adjusts for nonperformance risk or credit risk on its derivative instruments by deducting a
credit valuation adjustment (“CVA”). The CVA is based on the margin or debt spread of the Company or
counterparty and the tenor of the respective derivative instrument. The counterparty for a derivative asset
position is considered to be the bank or government sponsored banking entity or counterparty to the PPA or
commodity contract. The CVA for asset positions is based on the counterparty’s credit ratings and debt spreads
or, in the absence of readily obtainable credit information, the respective country debt spreads are used as a
proxy. The CVA for liability positions is based on the Parent Company’s or the subsidiary’s current debt spread,
the margin on indicative financing arrangements, or in the absence of readily obtainable credit information, the
respective country debt spreads are used as a proxy. If the instrument is recourse to the Parent Company, the
Parent Company’s current debt spread is used to adjust for nonperformance risk. All derivative instruments are
analyzed individually and are subject to unique risk exposures.
189
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Recurring Measurements:
The following table sets forth, by Level within the fair value hierarchy, the Company’s financial assets and
liabilities that were measured at fair value on a recurring basis as of December 31, 2010 and 2009. Financial
assets and liabilities have been classified in their entirety based on the lowest Level of input that is significant to
the fair value measurement. The Company’s assessment of the significance of a particular input to the fair value
measurement requires judgment, and may affect the determination of the fair value of the assets and liabilities
and their placement within the fair value hierarchy levels.
Quoted Market Significant

Prices in Active Other Significant
Market for Observable Unobservable Total
Identical Assets Inputs Inputs December 31,
(Level 1) (Level 2) (Level 3) 2010
(in millions)
Assets
Available-for-sale securities . . . . . . . . . . . . . . . . . . . $ 8 $1,712 $ 42 $1,762
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 — — 10
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 64 61 125
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18 $1,776 $103 $1,897
Liabilities
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $ 412 $ 12 $ 424
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . $— $ 412 $ 12 $ 424
Quoted Market Significant

Prices in Active Other Significant
Market for Observable Unobservable Total
Identical Assets Inputs Inputs December 31,
(Level 1) (Level 2) (Level 3) 2009
(in millions)
Assets
Available-for-sale securities . . . . . . . . . . . . . . . . . . . $133 $1,501 $ 42 $1,676
Trading securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 — — 7
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 111 30 141
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . $140 $1,612 $ 72 $1,824
Liabilities
Derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $ 280 $ 30 $ 310
Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . $— $ 280 $ 30 $ 310
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table presents a reconciliation of derivative assets and liabilities measured at fair value on a
recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2010 and 2009:
2010 2009
Interest Cross Foreign Commodity
Rate Currency Currency & Other Total Total
(in millions)
Balance at beginning of period(1) . . . . . . . . . . . . . . . . . . $ (12) $ (12) $— $ 24 $— $ (69)

Total gains (losses) (realized and unrealized):(1)
Included in earnings(2) . . . . . . . . . . . . . . . . . . 1 4 25 21 51 (20)
Included in other comprehensive income . . . (12) 13 — — 1 134
Included in regulatory assets . . . . . . . . . . . . . (3) — — 1 (2) —
Purchases, issuances and settlements(1) . . . . . . . . . 7 5 (1) (28) (17) 31
Transfers of assets (liabilities) into Level 3(3) . . . . — — (2) — (2) 1
Transfers of (assets) liabilities out of Level 3(3) . . . 18 — — — 18 (77)
Balance at end of period(1) . . . . . . . . . . . . . . . . . . . . . . . $ (1) $ 10 $ 22 $ 18 $ 49 $—
Total gains (losses) for the period included in
earnings attributable to the change in unrealized
gains (losses) relating to assets and liabilities
held at the end of the period(1) . . . . . . . . . . . . . . $— $ 7 $ 24 $ 9 $ 40 $ (2)
(1) Derivative assets and (liabilities) are presented on a net basis.

(2) The gains (losses) included in earnings for these Level 3 derivatives are classified as follows: interest rate and
cross currency derivatives as interest expense, foreign currency derivatives as foreign currency transaction
gains (losses) and commodity and other derivatives as either non-regulated revenue, non-regulated cost of sales
or other expense. See Note 6—Derivative Instruments and Hedging Activities for further information regarding
the classification of gains and losses included in earnings in the Consolidated Statements of Operations.
(3) Transfers in and out of Level 3 are determined as of the end of the reporting period and are from and to
Level 2. The (assets) liabilities transferred out of Level 3 are primarily the result of a decrease in the
significance of unobservable inputs used to calculate the credit valuation adjustments of these derivative
instruments. Similarly, the assets (liabilities) transferred into Level 3 are primarily the result of an increase
in the significance of unobservable inputs used to calculate the credit valuation adjustments of these
derivative instruments.
The following table presents a reconciliation of available-for-sale securities measured at fair value on a
recurring basis using significant unobservable inputs (Level 3) for the years ended December 31, 2010 and 2009:
2010 2009
(in millions)
Balance at beginning of period(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42 $ 42
Purchases, issuances and settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Balance at end of period . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 42 $ 42
Total gains (losses) for the period included in earnings attributable to the change in
unrealized gains/losses relating to assets held at the end of the period . . . . . . . . . . . . . . $— $—
191
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(1) Available-for-sale securities in Level 3 are auction rate securities and variable rate demand notes which
have failed remarketing or are not actively trading and for which there are no longer adequate observable
inputs to measure the fair value.
Nonrecurring Measurements:
For the purpose of impairment evaluation, the Company measured fair values of long-lived assets, goodwill
and intangibles assets, and assets and liabilities of discontinued operations under the fair value measurement
accounting guidance. The following table summarizes major categories of assets and liabilities measured at fair
value on a nonrecurring basis during the year and their level within the fair value hierarchy:
Fair Value
Carrying Gross
Amount (1) Level 1 Level 2 Level 3 (Gain) Loss
(in millions)
Long-lived assets held and used:
Eastern Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $827 $— $— $— $ 827
Southland (Huntington Beach) . . . . . . . . . . . . . . . . . . . . . . 288 — — 88 200
Tisza II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 — — 75 85
Deepwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83 — — 4 79
Discontinued operations and businesses held for sale:
Barka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 — 124 — (104)
Ras Laffan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 — 226 — (106)
Goodwill:
Deepwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 — — — 18
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 — — — 3
(1) Carrying amount as of the month end prior to impairment.
Long-lived Assets Held and Used

In the fourth quarter of 2010, the Company determined there were impairment indicators for the long-lived
assets at Eastern Energy, our coal-fired generation plants in New York. These long-lived assets had a carrying
amount of $827 million and were considered fully impaired. This resulted in the recognition of asset impairment
expense of $827 million.
In the fourth quarter of 2010, the Company determined there were impairment indicators for the long-lived
assets at Deepwater, our pet-coke-fired generation facility in Texas. These long-lived assets had a carrying
amount of $83 million and were written down to their fair value of $4 million. This resulted in the recognition of
asset impairment expense of $79 million.
In the third quarter of 2010, the Company determined there were impairment indicators for the long-lived
assets at Tisza II, our gas-fired generation plant in Hungary, and Huntington Beach, one of our gas-fired
generation plants in California. These long-lived assets had carrying amounts of $160 million and $288 million,
respectively, and were written down to their fair value of $75 million and $88 million, respectively. These
resulted in the recognition of asset impairment expense of $85 million and $200 million, respectively.
Since the majority of significant assumptions used in the valuations were not observable, management
believes that the measurements are Level 3 in the fair value hierarchy. For further discussion of these
impairments, see Note 19—Impairment Expense.
192
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Discontinued Operations and Held for Sale Businesses

The Company determined the fair value of nonfinancial assets and liabilities of our held for sale businesses
during the year ended December 31, 2010. These included the Company’s operations in Oman and Qatar.
Since the fair value estimates were based on sale price, management believes that the measurement is Level
2 in the fair value hierarchy. For further discussion, see Note 21—Discontinued Operations and Held for Sale
Businesses.
Goodwill
As noted in Note 8—Goodwill and Other Intangible Assets, goodwill of $18 million related to our
Deepwater business was written down to its implied fair value of zero during an interim impairment evaluation,
resulting in the recognition of goodwill impairment of $18 million for the year ended December 31, 2010.
Since the majority of significant assumptions used in the valuation were not observable, management
believes that the measurement is Level 3 in the fair value hierarchy. For further discussion, see Note 8—
Goodwill and Other Intangible Assets.
5. INVESTMENTS IN MARKETABLE SECURITIES

The following table sets forth the Company’s investments in marketable debt and equity securities classified
as trading and available-for-sale as of December 31, 2010 and 2009 by type of investment and by level within the
fair value hierarchy. The security types are determined based on the nature and risk of the security and are
consistent with how the Company manages, monitors and measures its securities.
December 31,
2010 2009
Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(in millions)
AVAILABLE-FOR-SALE:(1)
Debt securities:
Unsecured debentures(2) . . . . . . . . . . $— $ 727 $— $ 727 $— $ 667 $— $ 667
Certificates of deposit(2) . . . . . . . . . . — 877 — 877 — 652 — 652
Government debt securities . . . . . . — 47 — 47 — 152 — 152
Other . . . . . . . . . . . . . . . . . . . . . . . . — — 42 42 — — 42 42
Subtotal . . . . . . . . . . . . . . . . . . . . . . — 1,651 42 1,693 — 1,471 42 1,513
Equity securities:
Mutual funds . . . . . . . . . . . . . . . . . . 1 61 — 62 117 — — 117
Common stock . . . . . . . . . . . . . . . . 7 — — 7 16 — — 16
Money market funds . . . . . . . . . . . . — — — — — 30 — 30
Subtotal . . . . . . . . . . . . . . . . . . . . . . 8 61 — 69 133 30 — 163
Total available-for-sale . . . . . . . . . . . . . . 8 1,712 42 1,762 133 1,501 42 $1,676
TRADING:
Equity securities:
Mutual funds . . . . . . . . . . . . . . . . . . 10 — — 10 7 — — 7
Total trading . . . . . . . . . . . . . . . . . . . . . . 10 — — 10 7 — — 7
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . $ 18 $1,712 $ 42 $1,772 $140 $1,501 $ 42 $1,683
Held-to-maturity securities(3) . . . . . . . . . . — 8
Total marketable securities . . . . . . . . . . . $1,772 $1,691
193
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(1) Amortized cost approximated fair value at December 31, 2010 and 2009, with the exception of certain
common stock investments with a cost basis of $6 million carried at their fair value of $7 million and $16
million at December 31, 2010 and 2009, respectively.
(2) Unsecured debentures are instruments similar to certificates of deposit that are held primarily by our
subsidiaries in Brazil. The unsecured debentures and certificates of deposit included here do not qualify as
cash equivalents and meet the definition of a security under the relevant guidance and are therefore
classified as available-for-sale securities.
(3) Held-to-maturity securities are carried at amortized cost and not measured at fair value on a recurring basis.
These investments consist primarily of certificates of deposit and government debt securities. The amortized
cost approximated fair value of the held-to-maturity securities at December 31, 2009.
As of December 31, 2010, all available-for-sale debt securities had stated maturities less than one year, with
the exception of $42 million of auction rate securities and variable rate demand notes held by IPL, a subsidiary of
the Company in Indiana. These securities, classified as other debt securities in the table above, had stated
maturities of greater than ten years.
During the second quarter of 2009, three of the Company’s generation businesses in the Dominican Republic
exchanged $110 million of accounts receivable due from the government-owned distribution companies in the
Dominican Republic for sovereign bonds of the same amount. The bonds, which were classified as
available-for-sale securities, were adjusted to fair value when acquired. During the second and third quarters of
2009, the Company used a portion of the bonds with a carrying value of $31 million to settle third-party liabilities
and sold the remaining bonds. As of December 31, 2009, all of the sovereign bonds had been sold or transferred.
The following table summarizes the pre-tax gains and losses related to available-for-sale securities for the
years ended December 31, 2010, 2009 and 2008. There were no realized gains or losses on trading securities and
there were no realized losses on the sale of available-for-sale securities. There was no other-than-temporary
impairment of marketable securities recognized in earnings or other comprehensive income for the years ended
December 31, 2010, 2009 or 2008.
December 31,
2010 2009 2008
(in millions)
Gains (losses) included in other comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . $ 2 $ 10 $ (2)
Gains reclassified out of other comprehensive income into earnings . . . . . . . . . . . . . . — 2 —
Proceeds from sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5,888 4,466 5,006
Gross realized gains on sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 3 —
6. DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES

Risk Management Objectives
The Company is exposed to market risks associated with its enterprise-wide business activities, namely the
purchase and sale of fuel and electricity as well as foreign currency risk and interest rate risk. In order to manage
the market risks associated with these business activities, we enter into contracts that incorporate derivatives and
financial instruments, including forwards, futures, options, swaps or combinations thereof, as appropriate. The
Company applies hedge accounting for all contracts as long as they are eligible under the accounting standards
for derivatives and hedging. While derivative transactions are not entered into for trading purposes, some
contracts are not eligible for hedge accounting.
194
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Interest Rate Risk

AES and its subsidiaries utilize variable rate debt financing for construction projects and operations,
resulting in an exposure to interest rate risk. Interest rate swap, cap and floor agreements are entered into to
manage interest rate risk by effectively fixing or limiting the interest rate exposure on the underlying financing.
These interest rate contracts range in maturity through 2027, and are typically designated as cash flow hedges.
The following table sets forth, by underlying type of interest rate index, the Company’s current and maximum
outstanding notional under its interest rate derivative instruments, the weighted average remaining term and the
percentage of variable-rate debt hedged that is based on the related index as of December 31, 2010 regardless of
whether the derivative instruments are in qualifying cash flow hedging relationships:
December 31, 2010
Current Maximum(1)
Derivative Derivative Weighted % of Debt
Notional Notional Average Currently
Derivative Translated Derivative Translated Remaining Hedged
Interest Rate Derivatives Notional to USD Notional to USD Term(1) by Index(2)
(in millions) (in years)
LIBOR (U.S. Dollar) . . . . . . . . . . . . . . . . . 2,543 $2,543 2,671 $2,671 10 69%
EURIBOR (Euro) . . . . . . . . . . . . . . . . . . . . 1,233 1,651 1,233 1,651 13 72%
LIBOR (British Pound Sterling) . . . . . . . . . 44 68 44 68 10 69%
Securities Industry and Financial
Markets . . . . . . . . . . . . . . . . . . . . . . . . . .
Association Municipal Swap Index
(U.S. Dollar) . . . . . . . . . . . . . . . . . . 40 40 40 40 12 N/A(3)
(1) The Company’s interest rate derivative instruments primarily include accreting and amortizing notionals.
The maximum derivative notional represents the largest notional at any point between December 31, 2010
and the maturity of the derivative instrument, which includes forward starting derivative instruments. The
weighted average remaining term represents the remaining tenor of our interest rate derivatives weighted by
the corresponding maximum notional.
(2) Excludes variable-rate debt tied to other indices where the Company has no interest rate derivatives.
(3) The debt that was being hedged is no longer exposed to variable interest payments because it is now held on
IPL’s behalf and no longer bears interest.
Cross currency swaps are utilized in certain instances to manage the risk related to fluctuations in both
interest rates and certain foreign currencies. These cross currency contracts range in maturity through 2028. The
following table sets forth, by type of foreign currency denomination, the Company’s outstanding notional of its
cross currency derivative instruments as of December 31, 2010 which are all in qualifying cash flow hedge
relationships. These swaps are amortizing and therefore the notional amount represents the maximum
outstanding notional as of December 31, 2010:
December 31, 2010
Weighted % of Debt
Notional Average Currently
Translated Remaining Hedged
Cross Currency Swaps Notional to USD Term(1) by Index(2)
Chilean Unidad de Fomento (CLF) . . . . . . . . . . . . . . . . . . . . . . . . . . 6 $257 15 83%
(1) Represents the remaining tenor of our cross currency swaps weighted by the corresponding notional.
(2) Represents the proportion of foreign currency denominated debt hedged by the same foreign currency
denominated notional of the cross currency swap.
195
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Foreign Currency Risk

We are exposed to foreign currency risk as a result of our investments in foreign subsidiaries and affiliates.
AES operates businesses in many foreign environments and such operations in foreign countries may be
impacted by significant fluctuations in foreign currency exchange rates. Foreign currency options and forwards
are utilized, where possible, to manage the risk related to fluctuations in certain foreign currencies. These foreign
currency contracts range in maturity through 2011. The following tables set forth, by type of foreign currency
denomination, the Company’s outstanding notional over the remaining terms of its foreign currency derivative
instruments as of December 31, 2010 regardless of whether the derivative instruments are in qualifying hedging
relationships:
December 31, 2010

Weighted
Notional Probability Average
Translated Adjusted Remaining
Foreign Currency Options Notional(1) to USD(1) Notional(2) Term(3)
Brazilian Real (BRL) . . . . . . . . . . . . . . . . . . . . . . . 208 $120 $30 <1
Euro (EUR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 21 18 <1
Philippine Peso (PHP) . . . . . . . . . . . . . . . . . . . . . . 266 6 1 <1
British Pound (GBP) . . . . . . . . . . . . . . . . . . . . . . . . 3 4 2 <1
(1) Represents contractual notionals at inception of trade.
(2) Represents the gross notional amounts times the probability of exercising the option, which is based on
the relationship of changes in the option value with respect to changes in the price of the underlying
currency.
(3) Represents the remaining tenor of our foreign currency options weighted by the corresponding
notional.
December 31, 2010

Weighted
Notional Average
Translated Remaining
Foreign Currency Forwards Notional to USD Term(1)
Chilean Peso (CLP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 89,106 $179 <1
Colombian Peso (COP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13,151 7 <1
Argentine Peso (ARS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 13 <1
(1) Represents the remaining tenor of our foreign currency forwards weighted by the corresponding
notional.
196
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
In addition, certain of our subsidiaries have entered into contracts which contain embedded derivatives that require
separate valuation and accounting due to the fact that the item being purchased or sold is denominated in a currency other
than the functional currency of that subsidiary or the currency of the item. These contracts range in maturity through 2025.
The following table sets forth, by type of foreign currency denomination, the Company’s outstanding notional over the
remaining terms of its foreign currency embedded derivative instruments as of December 31, 2010:
December 31, 2010
Weighted
Notional Average
Translated Remaining
Embedded Foreign Currency Derivatives Notional to USD Term(1)
Philippine Peso (PHP) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21,176 $484 3
Kazakhstani Tenge (KZT) . . . . . . . . . . . . . . . . . . . . . . . . . . 31,084 210 10
Argentine Peso (ARS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 331 83 9
Euro (EUR) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 38 4
Brazilian Real (BRL) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 11 1
Cameroon Franc (XAF) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,755 4 2
(1) Represents the remaining tenor of our foreign currency embedded derivatives weighted by the
corresponding notional.
Commodity Price Risk

We are exposed to the impact of market fluctuations in the price of electricity, fuel and environmental
credits. Although we primarily consist of businesses with long-term contracts or retail sales concessions (which
provide our distribution businesses with a franchise to serve a specific geographic region), a portion of our
current and expected future revenues are derived from businesses without significant long-term purchase or sales
contracts. These businesses subject our results of operations to the volatility of prices for electricity, fuel and
environmental credits in competitive markets. We have used a hedging strategy, where appropriate, to hedge our
financial performance against the effects of fluctuations in energy commodity prices. The implementation of this
strategy can involve the use of commodity forward contracts, futures, swaps and options. Some of our businesses
hedge certain aspects of their commodity risks using financial hedging instruments, as described below.
We also enter into short-term contracts for electricity and fuel in other competitive markets in which we operate.
When hedging the output of our generation assets, we have power purchase agreements or other hedging instruments
that lock in the spread in dollars per MWh between the cost of fuel to generate a unit of electricity and the price at
which the electricity can be sold (“Dark Spread” where the fuel is coal). The portion of our sales and fuel purchases
that are not subject to such agreements will be exposed to commodity price risk. Eastern Energy sells electricity into
the power pools managed by the New York Independent System Operator (“NYISO”). In addition, Eastern Energy
hedges a portion of its power exposure by entering into hedges of natural gas prices, as movements in natural gas
prices affect power prices. As of December 31, 2010, Eastern Energy has no net exposure under its hedges of natural
gas prices. While there is a strong relationship between natural gas and power prices, the natural gas hedges do not
currently qualify for hedge accounting treatment. The following table sets forth the Company’s current notionals under
its commodity hedges at Eastern Energy and the percentage of forecasted electricity sales for 2011 hedged as of
December 31, 2010 regardless of whether the derivative instruments are in qualifying cash flow hedging relationships:
2011
% of
Forecasted
Commodity Hedges Notional Sales Hedged
(in millions)
NYISO electricity swaps (MWh) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 10%
197
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The PPAs and fuel supply agreements entered into by the Company are evaluated to determine if they meet
the definition of a derivative or contain embedded derivatives, either of which require separate valuation and
accounting. To be a derivative under the accounting standards for derivatives and hedging, an agreement would
need to have a notional and an underlying, require little or no initial net investment and could be net settled.
Generally, these agreements do not meet the definition of a derivative, often due to the inability to be net settled.
On a quarterly basis, we evaluate the markets for the commodities to be delivered under these agreements to
determine if facts and circumstances have changed such that the agreements could then be net settled and meet
the definition of a derivative.
Nonetheless, certain of the PPAs and fuel supply agreements entered into by certain of the Company’s
subsidiaries are derivatives or contain embedded derivatives requiring separate valuation and accounting. These
agreements range in maturity through 2024. The following table sets forth by type of commodity the Company’s
outstanding notionals for the remaining term of its commodity derivative (excluding Eastern Energy which is
presented in the above table) and embedded derivative instruments as of December 31, 2010:
December 31, 2010

Weighted
Average
Remaining
Commodity Derivatives Notional Term(1)
Natural gas (MMBtu) . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 12
Petcoke (Metric tons) . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 14
Aluminum (MWh) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17(3) 9
Certified Emission Reductions (CER) . . . . . . . . . . . . . . 1 2
Log wood (Tons) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (2) 2
Financial transmission rights (MW) . . . . . . . . . . . . . . . . — (2) <1
(1) Represents the remaining tenor of our commodity and embedded derivatives weighted by the
corresponding volume.
(2) De minimis amount.
(3) Our exposure is to fluctuations in the price of aluminum while the notional is based on the
amount of power we sell under the PPA.
In addition, as part of the settlement agreements terminating the gas transportation contracts with Gasoducto
GasAndes (Argentina) S.A. and Gasoducto GasAndes (Chile) S.A. discussed in Note 12—Contingencies, we
have an embedded derivative related to the dividends that could result from our 13% ownership in these two gas
transportation companies.
198
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Accounting and Reporting

The following table sets forth the Company’s derivative instruments as of December 31, 2010 and 2009 by
type of derivative and by level within the fair value hierarchy. Derivative assets and liabilities are recognized at
their fair value. Derivative assets and liabilities are combined with other balances and included in the following
captions in our Consolidated Balance Sheets: current derivative assets in other current assets, noncurrent
derivative assets in other noncurrent assets, current derivative liabilities in accrued and other liabilities and long-
term derivative liabilities in other long-term liabilities.
December 31, 2010 December 31, 2009

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
Assets
Current assets:
Foreign currency derivatives . . . . . . . . . . $— $ 4(1) $ 3 $ 7 $— $ 6 $— $ 6
Commodity and other derivatives:
Electricity . . . . . . . . . . . . . . . . . — — — — — 22 — 22
Natural gas . . . . . . . . . . . . . . . . — 1 — 1 — — 11 11
Other . . . . . . . . . . . . . . . . . . . . . — 2 3 5 — — 17 17
Total current assets . . . . . . . . . . . . . . — 7 6 13 — 28 28 56
Noncurrent assets:
Interest rate derivatives . . . . . . . . . . . . . . — 49 — 49 — 83 2 85
Foreign currency derivatives . . . . . . . . . . — 4(1) 27 31 — — — —
Cross currency derivatives . . . . . . . . . . . . — — 12 12 — — — —
Commodity and other derivatives . . . . . . — 4 16 20 — — — —
Total noncurrent assets . . . . . . . . . . . — 57 55 112 — 83 2 85
Total assets . . . . . . . . . . . . . . . . $— $ 64 $ 61 $125 $— $111 $ 30 $141
Liabilities
Current liabilities:
Interest rate derivatives . . . . . . . . . . . . . . $— $137(1) $— $137 $— $118 $ 7 $125
Cross currency derivatives . . . . . . . . . . . . — — 2 2 — — — —
Foreign currency derivatives . . . . . . . . . . — 13 — 13 — 3 — 3
Electricity . . . . . . . . . . . . . . . . . — 1 — 1 — 2 — 2
Natural gas . . . . . . . . . . . . . . . . — — — — — 5 — 5
Other . . . . . . . . . . . . . . . . . . . . . — — — — — — 2 2
Total current liabilities . . . . . . . . . . . — 151 2 153 — 128 9 137
Long-term liabilities:
Interest rate derivatives . . . . . . . . . . . . . . — 246(1) 1 247 — 150 7 157
Cross currency derivatives . . . . . . . . . . . . — — — — — — 12 12
Foreign currency derivatives . . . . . . . . . . — 15 8 23 — 2 — 2
Natural gas . . . . . . . . . . . . . . . . — — — — — — 2 2
Other . . . . . . . . . . . . . . . . . . . . . — — 1 1 — — — —
Total long-term liabilities . . . . . . . . . — 261 10 271 — 152 21 173
Total liabilities . . . . . . . . . . . . . $— $412 $ 12 $424 $— $280 $ 30 $310
199
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(1) Includes the impact of consolidating Cartagena beginning January 1, 2010 under VIE accounting guidance
as follows: $1 million of current assets and $4 million of noncurrent assets on foreign currency derivatives
and $19 million of current liabilities and $46 million of long-term liabilities for interest rate derivatives as of
December 31, 2010.
The following table sets forth the fair value and balance sheet classification of derivative instruments as of
December 31, 2010 and 2009:
Designated Not Designated Designated Not Designated
as Hedging as Hedging as Hedging as Hedging
Instruments Instruments Total Instruments Instruments Total
Assets
Other current assets:
Foreign currency derivatives . . . . . . $— $ 7(1) $ 7 $— $ 6 $ 6
Commodity & other derivatives:
Electricity . . . . . . . . . . . . . — — — 22 — 22
Natural gas . . . . . . . . . . . . — 1 1 — 11 11
Other . . . . . . . . . . . . . . . . . — 5 5 — 17 17
Total other current assets . . . . . — 13 13 22 34 56
Other assets:
Interest rate derivatives . . . . . . . . . . 49 — 49 85 — 85
Foreign currency derivatives . . . . . . — 31(1) 31 — — —
Cross currency derivatives . . . . . . . . 12 — 12 — — —
Commodity & other derivatives: . . . — 20 20 — — —
Total other
assets—noncurrent . . . . . . . . 61 51 112 85 — 85
Total assets . . . . . . . . . . . . . . . . . . . . . . . . $ 61 $ 64 $125 $107 $ 34 $141
Liabilities
Accrued and other liabilities:
Interest rate derivatives . . . . . . . . . . $126(1) $ 11 $137 $115 $ 10 $125
Cross currency derivatives . . . . . . . . 2 — 2 — — —
Foreign currency derivatives . . . . . . 8 5 13 2 1 3
Electricity . . . . . . . . . . . . . 1 — 1 2 — 2
Natural gas . . . . . . . . . . . . — — — — 5 5
Other . . . . . . . . . . . . . . . . . — — — — 2 2
Total accrued and other
liabilities . . . . . . . . . . . . . . . . 137 16 153 119 18 137
Other long-term liabilities:
Interest rate derivatives . . . . . . . . . . 232(1) 15 247 141 16 157
Cross currency derivatives . . . . . . . . — — — 12 — 12
Foreign currency derivatives . . . . . . — 23 23 — 2 2
Natural gas . . . . . . . . . . . . — — — — 2 2
Other . . . . . . . . . . . . . . . . . — 1 1 — — —
Total other long-term
liabilities . . . . . . . . . . . . . . . . 232 39 271 153 20 173
Total liabilities . . . . . . . . . . . . . . . . . . . . . $369 $ 55 $424 $272 $ 38 $310
200
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(1) Includes the impact of consolidating Cartagena beginning January 1, 2010 under VIE accounting guidance
as follows: $1 million of current assets and $4 million of noncurrent assets on foreign currency derivatives
and $19 million of current liabilities and $46 million of long-term liabilities for interest rate derivatives as of
December 31, 2010.
The Company has elected not to offset net derivative positions in the financial statements. Accordingly, the
Company does not offset such derivative positions against the fair value of amounts (or amounts that
approximate fair value) recognized for the right to reclaim cash collateral (a receivable) or the obligation to
return cash collateral (a payable) under master netting arrangements. At December 31, 2010 and 2009, we held
$0 and $8 million, respectively, of cash collateral that we received from counterparties to our derivative
positions, which is recorded in restricted cash and in accrued and other liabilities in the Consolidated Balance
Sheets. Beyond the cash collateral we received, our derivative assets are exposed to the credit risk of the
respective counterparty and, due to this credit risk, the fair value of our derivative assets (as shown in the above
two tables) have been reduced by a credit valuation adjustment. Also, at December 31, 2010 and 2009, we had no
cash collateral posted with (held by) counterparties to our derivative positions.
The table below sets forth the pre-tax accumulated other comprehensive income (loss) expected to be
recognized as an increase (decrease) to income from continuing operations before income taxes over the next
twelve months as of December 31, 2010 for the following types of derivative instruments:
Accumulated Other
Comprehensive
Income (Loss)
(in millions)
Interest rate derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(88)
Cross currency derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (4)
Foreign currency derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (9)
Commodity derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (1)
The balance in accumulated other comprehensive loss related to derivative transactions will be reclassified
into earnings as interest expense is recognized for interest rate hedges and cross currency swaps, as depreciation
is recognized for interest rate hedges during construction, as foreign currency transaction gains and losses are
recognized for hedges of foreign currency exposure, and as electricity sales and fuel purchases are recognized for
hedges of forecasted electricity and fuel transactions. These balances are included in the consolidated statements
of cash flows as operating and/or investing activities based on the nature of the underlying transaction.
For the years ended December 31, 2010, 2009 and 2008, pre-tax gains (losses) of $(1) million, $7 million,
and $(1) million net of noncontrolling interests, respectively, were reclassified into earnings as a result of the
discontinuance of a cash flow hedge because it was probable that the forecasted transaction would not occur by
the end of the originally specified time period (as documented at the inception of the hedging relationship) or
within an additional two-month time period thereafter.
201
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table sets forth the pre-tax gains (losses) recognized in accumulated other comprehensive loss
(“AOCL”) and earnings related to the effective portion of derivative instruments in qualifying cash flow hedging
relationships, as defined in the accounting standards for derivatives and hedging, for the years ended
Gains (Losses)
Gains (Losses) Reclassified
Recognized in from AOCL
AOCL into Earnings
2010 2009 Statement of Operations 2010 2009
Interest rate derivatives . . . . . . . . . . . . $(243)(3) $ 49 Interest expense . . . . . . . . . . . . . . . . . $(108)(1) $ (72)(1)
Non-regulated cost of sales . . . . . . . . (2) —
Net equity in earnings of affiliates . . (1) — (2)
Cross currency derivatives . . . . . . . . . . 11 48 Interest expense . . . . . . . . . . . . . . . . . (1) 2
Foreign currency transaction gains
(losses) . . . . . . . . . . . . . . . . . . . . . . — 43
Foreign currency derivatives . . . . . . . . Foreign currency transaction gains
(9) 2 (losses) . . . . . . . . . . . . . . . . . . . . . . (3) — (2)
Commodity derivatives—electricity . . . (8) 120 Non-regulated revenue 11 193
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . $(249) $219 $(104) $166
(1) Includes amounts that were reclassified from AOCL related to derivative instruments that previously, but no
longer, qualify for cash flow hedge accounting. Excludes $(113) million and $(35) million related to
discontinued operations for the years ended December 31, 2010 and 2009, respectively.
(3) Includes $(29) million related to Cartagena for the year ended December 31, 2010, which was consolidated
prospectively beginning January 1, 2010 under VIE accounting guidance.
Amounts recognized in AOCL due to derivative instruments that currently are, or previously were (but no
longer are) qualifying cash flow hedging relationships, as defined in the accounting standards for derivatives and
hedging, after income taxes, during the year ended December 31, 2008 are as follows:
Balance, Reclassification Change in Balance,

January 1 to earnings fair value December 31
(in millions)
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(232) $76 $(107) $(263)
202
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table sets forth the pre-tax gains (losses) recognized in earnings related to the ineffective
portion of derivative instruments in qualifying cash flow hedging relationships, as defined in the accounting
standards for derivatives and hedging, for the years ended December 31, 2010 and 2009:
Gains (Losses)
Recognized in Earnings
Classification in
Consolidated Statement of Operations 2010 2009
(in millions)
Interest rate derivatives . . . . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . $ (15) $ (8)
Net equity in earnings of affiliates . . . . . . — (1) (1)
Cross currency derivatives . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . 5 (11)
Foreign currency derivatives . . . . . . . . . . . . Foreign currency transaction gains
(losses) . . . . . . . . . . . . . . . . . . . . . . . . . — (1) — (1)
Commodity derivatives—electricity . . . . . . . Non-regulated revenue . . . . . . . . . . . . . . . — (2)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (10) $ (22)
The Company recognized after-tax losses of $45 million, net of noncontrolling interests, related to the
ineffective portion of derivative instruments in qualifying cash flow hedging relationships, as defined in the
accounting standards for derivatives and hedging, for the year ended December 31, 2008.
The following table sets forth the pre-tax gains (losses) recognized in earnings related to derivative
instruments not designated as hedging instruments under the accounting standards for derivatives and hedging,
for the years ended December 31, 2010 and 2009:
Gains (Losses)
Classification Recognized in Earnings
in Consolidated
Statement of Operations 2010 2009
(in millions)
Interest rate derivatives . . . . . . . . . . . . . . . . . Interest expense . . . . . . . . . . . . . . . . . . . . . $ (7) $ (25)
Foreign exchange derivatives . . . . . . . . . . . . Foreign currency transaction gains
(losses) . . . . . . . . . . . . . . . . . . . . . . . . . . (36) (38)
Net equity in earnings of affiliates . . . . . . . (2) — (1)
Commodity derivatives—natural gas . . . . . . Non-regulated revenue . . . . . . . . . . . . . . . . 47 (6)
Non-regulated cost of sales . . . . . . . . . . . . 3 (8)
Commodity & other derivatives . . . . . . . . . . Non-regulated revenue . . . . . . . . . . . . . . . . 21 1
Non-regulated cost of sales . . . . . . . . . . . . 2 (24)
Other income . . . . . . . . . . . . . . . . . . . . . . . — 8
Net equity in earnings of affiliates . . . . . . . — (1) — (1)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 28 $ (92)
The Company recognized after-tax gains of $10 million net of noncontrolling interests related to the
changes in fair value of derivative instruments not in qualifying cash flow hedging relationships, as defined in the
accounting standards for derivatives and hedging, for the year ended December 31, 2008.
203
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
In addition, IPL has two derivative instruments for which the gains and losses are accounted for in
accordance with accounting standards for regulated operations, as regulatory assets or liabilities. Gains and losses
on these derivatives due to changes in the fair value of these derivatives are probable of recovery through future
rates and are initially recognized as an adjustment to the regulatory asset or liability and recognized through
earnings when the related costs are recovered through IPL’s rates. Therefore, these gains and losses are excluded
from the above table. The following table sets forth the change in regulatory assets and liabilities resulting from
the change in the fair value of these derivatives for the years ended December 31, 2010 and 2009:
2010 2009
(in millions)
(Increase) decrease in regulatory assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(3) $—
Increase (decrease) in regulatory liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . $1 $ (4)
Credit Risk-Related Contingent Features

The following businesses have derivative agreements that contain credit contingent provisions which would
permit the counterparties with which we are in a net liability position to require collateral credit support when the
fair value of the derivatives exceeds the unsecured thresholds established in the agreements. These thresholds
vary based on our subsidiaries’ credit ratings and as their credit ratings are lowered, the thresholds decrease,
requiring more collateral support.
Eastern Energy, our generation business in New York, enters into commodity derivative transactions with
several counterparties who have market exposure limits defined in their transaction agreements. Pursuant to the
aforementioned credit contingent provisions, if Eastern Energy’s credit rating were to fall below the minimum
thresholds established in each of the respective transaction agreements, the counterparties could demand
immediate collateralization of the entire mark-to-market value of the derivatives (excluding credit valuation
adjustments) if the derivatives were in a net liability position. As of December 31, 2010, Eastern Energy has $1
million in net liability positions but had posted no collateral. As of December 31, 2009, Eastern Energy had net
liability positions of $2 million and had posted a nominal amount of collateral to support these positions based on
its current credit rating and the related thresholds in the agreements.
Gener, our generation business in Chile, has a cross currency swap agreement with a counterparty to swap
Chilean inflation indexed bonds issued in December 2007 into U.S. Dollars. Pursuant to the aforementioned
credit contingent provisions, if Gener’s credit rating were to fall below the minimum threshold established in the
swap agreements, the counterparty can demand immediate collateralization of the entire mark-to-market value of
the swaps (excluding credit valuation adjustments) if Gener is in a net liability position, which was zero and $12
million, respectively, at December 31, 2010 and 2009. As of December 31, 2010 and 2009, Gener had posted
zero and $25 million, respectively, in the form of a letter of credit to support these swaps.
204
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
7. INVESTMENTS IN AND ADVANCES TO AFFILIATES

The following table summarizes the relevant effective equity ownership interest and carrying values for the
Company’s investments accounted for under the equity method as of December 31, 2010 and 2009.
December 31,
Affiliate Country 2010 2009 2010 2009
Carrying Value Ownership Interest %
(in millions)
AES Solar Energy Ltd. . . . . . . . . . . . . . . . . . . . . . . . . United States $ 256 $ 224 50% 50%
AES Solar Power Ltd. . . . . . . . . . . . . . . . . . . . . . . . . . United States 8 — 50% — %
Barry(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . United Kingdom — — 100% 100%
Cartagena . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Spain N/A — N/A 71%
CEMIG(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Brazil 22 — 72% 10%
Chigen affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 146 182 25% 27%
China Wind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 69 52 49% 49%
Elsta . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Netherlands 202 204 50% 50%
Guacolda . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Chile 149 131 35% 35%
IC Ictas Energy Group . . . . . . . . . . . . . . . . . . . . . . . . Turkey 151 104 51% 51%
InnoVent(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . France 31 30 40% 40%
JHRH . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China 39 — 35% — %
OPGC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . India 224 208 49% 49%
Trinidad Generation Unlimited(1) . . . . . . . . . . . . . . . . Trinidad 20 16 10% 10%
Other affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 6 — % — %
Total investments in and advances to
affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,320 $1,157
(1) Represent VIEs in which we hold a variable interest, but are not the primary beneficiary.
(2) The Company sold its interest in CEMIG during the year ended December 31, 2010; and retains its equity
ownership in Cayman Energy Traders (“CET”). See additional discussion of the sale below.
AES Solar Energy Ltd.—In March 2008, the Company formed AES Solar Energy Ltd (“AES Solar”), a
joint venture with Riverstone Holdings LLC (“Riverstone”). AES Solar develops land-based solar photovoltaic
panels that capture sunlight to convert into electricity that feed directly into power grids. AES Solar is accounted
for under the equity method of accounting based on the Company’s 50% ownership and significant influence, but
not control over the joint venture. Under the terms of the agreement, the Company and Riverstone may each
provide up to $500 million of capital over the next five years. As of December 31, 2010, AES had invested
approximately $312 million in the joint venture.
AES Solar Power Ltd.—In March 2010, the Company formed AES Solar Power Ltd. (“AES Solar Power”),
a joint venture with Riverstone. AES Solar Power develops solar photovoltaic projects in the United States.
AES Solar Power is accounted for under the equity method of accounting based on the Company’s
50% ownership and significant influence, but not control over the joint venture. Under the terms of the
agreement, the Company and Riverstone may each provide up to $100 million of capital over the next five years.
As of December 31, 2010, AES had invested approximately $11 million in the joint venture.
AES Barry Ltd.—The Company holds a 100% ownership interest in AES Barry Ltd. (“Barry”), a dormant
entity in the United Kingdom that disposed of its generation and other operating assets. As a result of a debt
agreement, no material financial or operating decisions can be made without the banks’ consent, and the
Company does not control Barry. As of December 31, 2010 and 2009, other long-term liabilities included
$53 million and $54 million, respectively, related to this debt agreement.
205
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Cartagena Energia—The Company owns 71% of Cartagena Energia (“Cartagena”), a 1,199 MW power
plant in Cartagena, Spain completed in November 2007. The Company’s initial investment in Cartagena was
approximately $29 million. As a result of the accounting guidance issued in 2009 regarding VIEs, the Company
consolidated Cartagena effective January 1, 2010. Cartagena is no longer accounted for under the equity method
of accounting. For further discussion, see Note 1—General and Summary of Significant Accounting Policies.
CEMIG—During the second quarter of 2010, the Company, through its Brazilian subsidiary, Southern
Electric Brasil Participações Ltda. (“SEB”), transferred its shares of Companhia Energética de Minas Gerais
(“CEMIG”), an integrated utility in Minas Gerais, Brazil, to Andrade Gutierrez Concessões S.A. and an affiliated
company (jointly referred to as, “AG”). AG also assumed SEB’s debt with Banco Nacional de Desenvolvimento
Econômico e Social (“BNDES”) in the amount of approximately $1.4 billion (the “BNDES Loan”) including all
unpaid interest and penalties. In exchange, SEB received $25 million and obtained a full release from any claims
of BNDES and originating from the BNDES Loan. See Note 12—Contingencies, for additional information
regarding these claims and proceedings.
Prior to the transfer of shares, the Company, through SEB, a VIE, had a 14.8% voting interest in CEMIG.
The Company holds its interest in SEB through its equity ownership in Cayman Energy Traders (“CET”), a
holding company whose sole activity is its investment in SEB. Although our interest in CEMIG was below 20%,
AES had significant influence over the operational and financial policies of CEMIG through representation on
the board of directors of CEMIG. In 2002, the Company determined there was an other-than-temporary
impairment of its investment in CEMIG and wrote it down to fair market value, $155 million. Additionally, AES
established a valuation allowance against a deferred tax asset related to its investment in CEMIG. The total
amount of these charges, net of tax, was $587 million. As a result, the Company’s investment in CEMIG was a
$484 million net liability at December 31, 2009 and was included in “Other long-term liabilities” on the
Consolidated Balance Sheet. The Company discontinued the application of the equity method in accordance with
its accounting policy regarding equity method investments.
The consummation of the share purchase and sale agreement along with AG’s assumption of the BNDES
Loan in June 2010 resulted in the reversal of the Company’s net long-term liability along with the associated
cumulative translation adjustment, resulting in the recognition of a $115 million pre-tax gain reflected in “Net
equity in earnings of affiliates” on the Consolidated Statement of Operations for the year ended December 31,
2010. Additionally, $70 million of net tax expense resulting from the CEMIG sale transaction was recorded as
“income tax expense,” rather than equity earnings, since the expense is attributable to a consolidated corporate
level partner in the CEMIG investment.
The Company retains its ownership in CET.
China Wind—In May 2007, the Company entered into a joint venture with Guohua Energy Investment Co.
Ltd. (“Guohua”) for a 49% interest in Guohua AES (Huanghua) Wind Power Co., Ltd. (“AES Huanghua”) that is
primarily engaged to develop, construct, own and operate wind projects in Huanghua. Huanghua I went live in
the third quarter of 2009 and Huanghua II went live in April 2010. In the second and third quarters of 2008, the
Company acquired a 49% interest in Guohua AES (“Hulunbeier”) Wind Power Co., Ltd. and entered into joint
venture agreements with Guohua for 49% interest in Guohua AES (“Xinba’erhu”) Wind Power Co., Ltd. (“Dong
Qi”) which went live in June 2010 and Guohua AES (“Chenba’erhu”) Wind Power Co., Ltd. (“Chen Qi”) which
is expected to go live in 2011. The Company invested approximately $12 million in the aforementioned projects
in 2010, bringing the cumulative investment to $62 million.
206
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Jianghe Rural Electrification Development Co., LTD (“JHRH”)— On June 3, 2010, the Company entered
into an agreement to acquire a 35% ownership in this joint venture which operates seven hydro plants in China.
The agreement entitled the Company to acquire up to a 49% interest. The purchase of an additional 14%
ownership is expected to be completed by May 2011.
Trinidad Generation Unlimited—In 2007, the Company began pursuing a development project to construct
and operate a 720 MW combined cycle power plant in Trinidad through its wholly owned subsidiary, Trinidad
Generation Unlimited (“TGU”). In July 2008, a shareholder agreement was executed establishing the Company’s
ownership interest in TGU at 60% with the remaining 40% interest held by the Government of Trinidad and
Tobago. Although the Company’s ownership in TGU was reduced to 10% in 2009, the Company continues to
account for its investment in Trinidad as an equity method investment because AES continues to exercise
significant influence through the supermajority vote requirement for any significant future project development
activities.
Summarized Financial Information

The following tables summarize financial information of the Company’s 50%-or-less owned affiliates and
majority-owned unconsolidated subsidiaries that are accounted for using the equity method.
Majority-Owned
50%-or-less Owned Affiliates Unconsolidated Subsidiaries
Years ended December 31, 2010 2009 2008 2010 2009 2008
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,341 $1,229 $1,180 $ 20 $ 158 $170
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 240 274 18 71 61
Net income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 110 83 7 (5) (4)
December 31, 2010 2009 2010 2009

Current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 948 $ 882 $114 $ 142
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,131 3,543 646 1,140
Current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 687 528 144 153
Noncurrent liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,597 1,406 242 1,055
Noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . (206) (191) 125 (24)
Stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,001 2,682 249 98
At December 31, 2010, retained earnings included $168 million related to the undistributed earnings of the
Company’s 50%-or-less owned affiliates. Distributions received from these affiliates were $49 million,
$35 million and $50 million for the years ended December 31, 2010, 2009 and 2008, respectively.
Refer to Item 1 of this Form 10-K for additional information on these affiliates.
207
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
8. GOODWILL AND OTHER INTANGIBLE ASSETS
The following table summarizes the changes in the carrying amount of goodwill, by segment for the years
ended December 31, 2010, 2009 and 2008. There was no goodwill associated with our North America—Utilities
segment during the years ended December 31, 2010, 2009 and 2008.
Latin Latin North

America - America - America - Europe - Asia - Corporate
Generation Utilities Generation Generation Generation and Other Total
Balance as of December 31,

2008
Goodwill . . . . . . . . . . . . . . . $926 $140 $121 $ 127 $ 78 $101 $1,493
Accumulated impairment
losses . . . . . . . . . . . . . . . . (24) (7) (20) (19) — (2) (72)
Net balance . . . . . . . . . 902 133 101 108 78 99 1,421
Impairment losses . . . . . . . . — — — (118) — (4) (122)
Goodwill associated with
the sale of a business . . . . — — — — (2) — (2)
Foreign currency translation
and other . . . . . . . . . . . . . — — (10) 10 2 — 2
2009
Goodwill . . . . . . . . . . . . . . . 926 140 111 137 78 101 1,493
losses . . . . . . . . . . . . . . . . (24) (7) (20) (137) — (6) (194)
Net balance . . . . . . . . . 902 133 91 — 78 95 1,299
Impairment losses . . . . . . . . — — (18) — — (3) (21)
Foreign currency translation
and other . . . . . . . . . . . . . — — (10) — 3 — (7)
2010
Goodwill . . . . . . . . . . . . . . . 926 140 101 137 81 101 1,486
losses . . . . . . . . . . . . . . . . (24) (7) (38) (137) — (9) (215)
Net balance . . . . . . . . . $902 $133 $ 63 $— $ 81 $ 92 $1,271
During the third quarter of 2010, Deepwater, our petcoke-fired merchant generation facility in Texas,
reported in the North America Generation segment, incurred a goodwill impairment of $18 million. The
Company determined that there was an impairment indicator for Deepwater’s goodwill. This determination was
based primarily on the fact that Deepwater did not operate for more than 30 days in the third quarter of 2010,
incurred current operating and cash flow losses and, at that time, was forecasting operating and cash flow losses
for the remainder of 2010 through 2014. This resulted from a decrease in future power price expectations and an
increase in pet coke prices affecting the market. The Company performed the two-step goodwill impairment test
of Deepwater’s goodwill as of August 31, 2010 and recognized the entire $18 million carrying amount of
goodwill as goodwill impairment.
208
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
In 2009, Kilroot, our subsidiary in the United Kingdom, reported in the Europe Generation segment,
incurred a goodwill impairment loss of $118 million. Kilroot is a generation plant fired primarily by coal. Factors
contributing to the impairment included: reduced profit expectations based on latest estimates of future
commodity prices and reduced expectations on the recovery of cash flows on the existing plant following the
Company’s decision to forgo capital expenditures to meet emission allowance requirements taking effect in
2024. Additionally, one of our subsidiaries located in the Ukraine and reported within “Corporate and Other”
incurred a goodwill impairment loss of $4 million. For the year ended December 31, 2008, the Company had no
goodwill impairment.
The following tables summarize the balances comprising other intangible assets in the accompanying
Consolidated Balance Sheets as of December 31, 2010 and 2009:

Gross Accumulated Net Gross Accumulated Net
Balance Amortization Balance Balance Amortization Balance
Subject to Amortization
Project development rights(1) . . . . . . . . . . . . . . . . $141 $— $141 $— $— $—
Sales concessions . . . . . . . . . . . . . . . . . . . . . . . . 162 (88) 74 167 (84) 83
Contractual payment rights(2) . . . . . . . . . . . . . . . 65 (4) 61 — — —
Land use rights . . . . . . . . . . . . . . . . . . . . . . . . . . 50 (2) 48 48 (1) 47
Management rights . . . . . . . . . . . . . . . . . . . . . . . 66 (30) 36 64 (27) 37
Emission allowances(3) . . . . . . . . . . . . . . . . . . . . 26 — 26 18 — 18
Inseparable intangible assets(4) . . . . . . . . . . . . . . 8 (4) 4 253 (83) 170
Other(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 (32) 62 118 (28) 90
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612 (160) 452 668 (223) 445
Indefinite-Lived Intangible Assets
Land use rights . . . . . . . . . . . . . . . . . . . . . . . . . . 51 — 51 50 — 50
Emission allowances(6) . . . . . . . . . . . . . . . . . . . . 8 — 8 15 — 15
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 — 5 — — —
Subtotal . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64 — 64 65 — 65
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $676 $(160) $516 $733 $(223) $510
(1) Represent development rights, including but not limited to, land control, various permits and right to acquire
equity interests in development projects resulting from asset acquisitions by our Wind group.
(2) Represent legal rights to receive system reliability payments from the regulator.
(3) Acquired or purchased emission allowances are expensed when utilized and included in net income for the
year.
(4) Represent various intangible assets relating to an asset acquisition in the state of New York in 1999. During
the fourth quarter of 2010, the unamortized amount of $158 million was recognized as impairment expense
as part of Eastern Energy long-lived asset impairment evaluation.
(5) Consists of various intangible assets including PPAs and transmission rights, none of which is individually
significant.
(6) Represent perpetual emission allowances without an expiration date.
209
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes, by category, intangible assets acquired during the years ended
December 31, 2010

Weighted
Subject to Average
Amortization/ Amortization Amortization
Amount Indefinite-Lived Period Method
Project development rights . . . . $141 Subject to amortization Various Straight line
Contractual payment rights . . . 65 Subject to amortization 10 Straight line
Emission allowances . . . . . . . . 14 Subject to amortization Various As utilized
Land use rights . . . . . . . . . . . . . 7 Indefinite-lived N/A N/A
Total . . . . . . . . . . . . . . . . . . . . . $227
December 31, 2009

Weighted
Subject to Average
Amortization/ Amortization Amortization
Amount Indefinite-Lived Period Method
Emission allowances . . . . . . . . $ 17 Subject to amortization Various As utilized
Land use rights . . . . . . . . . . . . . 4 Indefinite-lived N/A N/A
Other . . . . . . . . . . . . . . . . . . . . . 1 Subject to amortization 35 —
Total . . . . . . . . . . . . . . . . . . . . . $ 22
In 2009, the Company reclassified $42 million from other assets into intangible assets at a subsidiary in
Latin America.
The following table summarizes the estimated amortization expense, broken down by intangible asset
category, for 2011 through 2015:
Estimated amortization expense

2011 2012 2013 2014 2015
(in millions)
Contractual payment rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $ 9 $ 9 $ 9 $ 9
Sales concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6 6 6 6
All other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 6 5 4 4
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $22 $21 $20 $19 $19
Intangible asset amortization expense was $21 million, $24 million and $19 million for the years ended
December 31, 2010, 2009 and 2008, respectively.
210
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
9. REGULATORY ASSETS & LIABILITIES

The Company has recorded regulatory assets and liabilities that it expects to pass through to its customers in
accordance with, and subject to, regulatory provisions as follows:
December 31,
2010 2009 Recovery Period
(in millions)
REGULATORY ASSETS
Current regulatory assets:
Brazil tariff recoveries:(1)
Energy purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 62 $ 144 Over tariff reset period
Transmission costs, regulatory fees and other . . . . . . . . . . . . . . 82 120 Over tariff reset period
El Salvador tariff recoveries(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67 125 Over tariff reset period
Other(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 6 Various
Total current regulatory assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 395
Noncurrent regulatory assets:
Defined benefit pension obligations at IPL(4)(5) . . . . . . . . . . . . . . . . . . 235 217 Various
Income taxes recoverable from customers(4)(6) . . . . . . . . . . . . . . . . . . . 66 70 Various
Energy purchases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 22 Over tariff reset period
Other(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 119 111 Various
Total noncurrent regulatory assets . . . . . . . . . . . . . . . . . . . . . . . . . 470 450
TOTAL REGULATORY ASSETS . . . . . . . . . . . . . . . . . . . . . . . . . $ 682 $ 845
REGULATORY LIABILITIES
Current regulatory liabilities:
Efficiency program costs(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 58 $ 133 Over tariff reset period
Other(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39 35 Various
Total current regulatory liabilities . . . . . . . . . . . . . . . . . . . . . . . . . 286 296
Noncurrent regulatory liabilities:
Asset retirement obligations(9) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 509 482 Over life of assets
Brazil special obligations(10) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 435 402 To be determined
Efficiency program costs(7) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 4 Over tariff reset period
Other(8) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 17 Various
Total noncurrent regulatory liabilities . . . . . . . . . . . . . . . . . . . . . . 1,137 982
TOTAL REGULATORY LIABILITIES . . . . . . . . . . . . . . . . . . . . $1,423 $1,278
211
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(1) Recoverable per National Electric Energy Agency (“ANEEL”) regulations through the Annual Tariff
Adjustment (“IRT”). These costs are generally non-controllable costs and primarily consist of purchased
electricity, energy transmission costs and sector costs that are considered volatile. These costs are recovered
in 24 installments through the annual IRT process and are amortized over the tariff reset period.
(2) Deferred fuel costs incurred by our El Salvador subsidiaries associated with purchase of energy from the
El Salvador spot market and the power generation plants. In El Salvador, the deferred fuel adjustment
represents the variance between the actual fuel costs and the fuel costs recovered in the tariffs. The variance
is recovered semi-annually at the tariff reset period.
(3) Includes assets with and without a rate of return. All current regulatory assets earned a rate of return as of
December 31, 2010 and 2009. Other noncurrent regulatory assets that did not earn a rate of return were
$95 million and $90 million, as of December 31, 2010 and 2009, respectively. Those without a rate of return
that are recoverable primarily consist of transmission service costs and other administrative costs from IPL’s
participation in the Midwest ISO market. Recovery of costs is probable, but the timing is not yet
determined.
(4) Past expenditures on which the Company does not earn a rate of return.
(5) The regulatory accounting standards allow the defined pension and postretirement benefit obligation to be
recorded as a regulatory asset equal to the previously unrecognized actuarial gains and losses and prior
service costs that are expected to be recovered through future rates. Pension expense is recognized based on
the plan’s actuarially determined pension liability. Recovery of costs is probable, but not yet determined.
Pension contributions made by our Brazilian subsidiaries are not included in regulatory assets as those
contributions are not covered by the established tariff in Brazil.
(6) Probable of recovery through future rates, based upon established regulatory practices, which permit the
recovery of current taxes. This amount is expected to be recovered, without interest, over the period as
book-tax temporary differences reverse and become current taxes.
(7) Payments received for costs expected to be incurred to improve the efficiency of our plants in Brazil that are
refunded as part of the IRT.
(8) Other Current and Noncurrent Regulatory Liabilities consist of:
• Deferred fuel costs, which are expected to be refunded to customers as a credit against future fuel
adjustment charges. In the United States, deferred fuel costs at IPL represent variances between
estimated and actual fuel and purchased power costs. IPL is required to refund overestimated fuel and
purchased power costs in future rates.
• Penalties and fees from regulators at our Brazilian subsidiaries.
• Financial transmission rights used to hedge exposure in the Midwest ISO market that are credited per
specific rate orders.
• The cost incurred by electricity generators due to variance in energy prices during rationing periods
(Free Energy). Our Brazilian subsidiaries are authorized to recover or refund this cost associated with
monthly energy price variances between the wholesale energy market prices owed to the power
generation plants producing Free Energy and the capped price reimbursed by the local distribution
companies which are passed through to the final customers through energy tariffs.
(9) Obligations for removal costs which do not have an associated legal retirement obligation as defined by the
accounting standards on asset retirement obligations.
(10) Obligations established by ANEEL in Brazil associated with electric utility concessions and represent
amounts received from customers or donations not subject to return. These donations are allocated to
support energy network expansion and to improve utility operations to meet customers’ needs. The term of
the obligation is established by ANEEL. Settlement shall occur when the concession ends.
212
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The current regulatory assets and liabilities are recorded in “Other current assets” and “Accrued and other
liabilities,” respectively, on the accompanying Consolidated Balance Sheets. The noncurrent regulatory assets
and liabilities are recorded in “Other assets” and “Other long-term liabilities,” respectively, in the accompanying
Consolidated Balance Sheets.
The following table summarizes regulatory assets by region as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $265 $445
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 400
Total regulatory assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $682 $845
The following table summarizes regulatory liabilities by region as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Latin America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 897 $ 772
North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 526 506
Total regulatory liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,423 $1,278
10. DEBT
The Company has two types of debt reported on its Consolidated Balance Sheets: non-recourse and recourse
debt. Non-recourse debt is used to fund investments and capital expenditures for the construction and acquisition
of electric power plants, wind projects, distribution companies and other project-related investments at our
subsidiaries. Non-recourse debt is generally secured by the capital stock, physical assets, contracts and cash
flows of the related subsidiary. Absent guarantees, intercompany loans or other credit support, the default risk is
limited to the respective business and is without recourse to the Parent Company and other subsidiaries, though
the Company’s equity investments and/or subordinated loans to projects (if any) are at risk. Recourse debt is
direct borrowings by the Parent Company and is used to fund development, construction or acquisitions,
including serving as funding for equity investments or loans to the affiliates. The Parent Company’s debt is,
among other things, recourse to the Parent Company and is structurally subordinated to the affiliates’ debt.
The following table summarizes the carrying amount and estimated fair values of the Company’s recourse
and non-recourse debt as of December 31, 2010 and 2009:
December 31,
2010 2009
Carrying Fair Carrying Fair
Amount Value Amount Value
(in millions)
Non-recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,121 $15,471 $14,022 $14,405
Recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,612 4,868 5,515 5,603
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $19,733 $20,339 $19,537 $20,008
213
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Recourse and non-recourse debt are carried at amortized cost. The fair value of recourse debt is estimated
based on quoted market prices. The fair value of non-recourse debt is estimated differently based upon the type
of loan. The fair value of fixed rate loans is estimated using quoted market prices, if available or a discounted
cash flow analysis. In the discounted cash flow analysis, the discount rate is based on the credit rating of the
individual debt instruments if available, or the credit rating of the subsidiary. If the subsidiary’s credit rating is
not available, a synthetic credit rating is determined using certain key metrics, including cash flow ratios and
interest coverage, as well as other industry specific factors. For subsidiaries located outside of the U.S., in the
event that the country rating is lower than the credit rating previously determined, the country rating is used for
the purposes of the discounted cash flow analysis. The fair value of recourse and non-recourse debt excludes
accrued interest at the valuation date.
The estimated fair value was determined using available market information as of December 31, 2010 and
2009. The Company is not aware of any factors that would significantly affect the estimated fair value amounts
since December 31, 2010.
NON-RECOURSE DEBT
The following table summarizes the carrying amount and terms of non-recourse debt as of December 31,
2010 and 2009:
December 31,
Interest
NON-RECOURSE DEBT Rate(1) Maturity 2010 2009
(in millions)
VARIABLE RATE:(2)
Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.39% 2011 – 2027 $ 3,840 $ 3,118
Notes and bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.14% 2011 – 2020 2,982 1,922
Debt to (or guaranteed by) multilateral, export credit agencies or
development banks(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.95% 2011 – 2027 1,848 1,679
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.13% 2011 – 2038 365 922
FIXED RATE:
Bank loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.44% 2011 – 2023 424 446
Notes and bonds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7.35% 2011 – 2037 5,007 5,450
Debt to (or guaranteed by) multilateral, export credit agencies or
development banks(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.41% 2011 – 2027 467 406
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.32% 2011 – 2039 188 79
SUBTOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,121(4) $14,022(4)
Less: Current maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,577) (1,718)
TOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12,544 $12,304
(1) Weighted average interest rate at December 31, 2010.

(2) The Company has interest rate swaps and interest rate option agreements in an aggregate notional principal
amount of approximately $4.3 billion on non-recourse debt outstanding at December 31, 2010. The swap
agreements economically change the variable interest rates on the portion of the debt covered by the
notional amounts to fixed rates ranging from approximately 0.71% to 6.98%. The option agreements fix
interest rates within a range from 4.03% to 7.00%. The agreements expire at various dates from 2016
through 2027.
214
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(3) Multilateral loans include loans funded and guaranteed by bilaterals, multilaterals, development banks and
other similar institutions.
(4) Non-recourse debt of $708 million as of December 31, 2009 was excluded from non-recourse debt and
included in current and long-term liabilities of held for sale and discontinued businesses in the
accompanying Consolidated Balance Sheets.
Non-recourse debt as of December 31, 2010 is scheduled to reach maturity as set forth in the table below:
Annual
December 31, Maturities
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,577
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 657
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 953
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,839
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,138
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,957
Total non-recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $15,121
As of December 31, 2010, AES subsidiaries with facilities under construction had a total of approximately
$432 million of committed but unused credit facilities available to fund construction and other related costs.
Excluding these facilities under construction, AES subsidiaries had approximately $893 million in a number of
available but unused committed revolving credit lines to support their working capital, debt service reserves and
other business needs. These credit lines can be used in one or more of the following ways: solely for borrowings;
solely for letters of credit; or a combination of these uses. The weighted average interest rate on borrowings from
these facilities was 3.24% at December 31, 2010.
Non-Recourse Debt Covenants, Restrictions and Defaults

The terms of the Company’s non-recourse debt include certain financial and non-financial covenants. These
covenants are limited to subsidiary activity and vary among the subsidiaries. These covenants may include but
are not limited to maintenance of certain reserves, minimum levels of working capital and limitations on
incurring additional indebtedness. Compliance with certain covenants may not be objectively determinable.
As of December 31, 2010 and 2009, approximately $803 million and $653 million, respectively, of
restricted cash was maintained in accordance with certain covenants of the non-recourse debt agreements, and
these amounts were included within “Restricted cash” and “Debt service reserves and other deposits” in the
accompanying Consolidated Balance Sheets.
Various lender and governmental provisions restrict the ability of certain of the Company’s subsidiaries to
transfer their net assets to the Parent Company. Such restricted net assets of subsidiaries amounted to
approximately $5.4 billion at December 31, 2010.
215
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes the Company’s subsidiary non-recourse debt in default or accelerated as of
December 31, 2010 and is included in the current portion of non-recourse debt unless otherwise indicated:
December 31, 2010

Primary Nature
Subsidiary of Default Default Net Assets
(in millions)
Maritza . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Covenant $ 986 $262
Sonel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Covenant 390 357
Kelanitissa . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Covenant 28 31
Aixi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Payment 4 (8)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,408
None of the subsidiaries that are currently in default are subsidiaries that met the applicable definition of
materiality under AES’ corporate debt agreements as of December 31, 2010 in order for such defaults to trigger
an event of default or permit acceleration under such indebtedness. The bankruptcy or acceleration of material
amounts of debt at such entities would cause a cross default under the recourse senior secured credit facility.
However, as a result of additional dispositions of assets, other significant reductions in asset carrying values or
other matters in the future that may impact our financial position and results of operations or the financial
position or results of the individual subsidiary, it is possible that one or more of these subsidiaries could fall
within the definition of a “material subsidiary” and thereby upon a bankruptcy or acceleration of its non-recourse
debt trigger an event of default and possible acceleration of the indebtedness under the AES Parent Company’s
outstanding debt securities.
RECOURSE DEBT
The following table summarizes the carrying amount and terms of recourse debt of the Company as of
December 31,
RECOURSE DEBT Interest Rate Maturity 2010 2009
(in millions)
Senior Unsecured Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.375% 2010 $ — $ 214
Senior Secured Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . LIBOR + 1.75% 2011 200 200
Senior Unsecured Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.875% 2011 129 129
Second Priority Senior Secured Note . . . . . . . . . . . . . . . . . . . . . . . . 8.75% 2013 — 690
Senior Unsecured Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00% 2017 1,500 1,500
Term Convertible Trust Securities . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.75% 2029 517 517
Unamortized discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28) (34)
SUBTOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,612 $5,515
Less: Current maturities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (463) (214)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,149 $5,301
216
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Recourse debt as of December 31, 2010 is scheduled to reach maturity as set forth in the table below:
December 31, Annual Maturities
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 463
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,152
Total recourse debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,612
Recourse Debt Transactions

During 2010, the Company redeemed $690 million aggregate principal of its 8.75% Second Priority Senior
Secured Notes due 2013 (“the 2013 Notes”). The 2013 Notes were redeemed at a redemption price equal to
101.458% of the principal amount redeemed. The Company recognized a pre-tax loss on the redemption of the
2013 Notes of $15 million for the year ended December 31, 2010, which is included in “Other expense” in the
accompanying Consolidated Statement of Operations.
On July 29, 2010, the Company entered into a second amendment (“Amendment No. 2”) to the Fourth
Amended and Restated Credit and Reimbursement Agreement, dated as of July 29, 2008, among the Company,
various subsidiary guarantors and various lending institutions (the “Existing Credit Agreement”) that amends and
restates the Existing Credit Agreement (as so amended and restated by Amendment No. 2, the “Fifth Amended
and Restated Credit Agreement”). The Fifth Amended and Restated Credit Agreement adjusted the terms and
conditions of the Existing Credit Agreement, including the following changes:
• the aggregate commitment for the revolving credit loan facility was increased to $800 million;
• the final maturity date of the revolving credit loan facility was extended to January 29, 2015;
• changes to the facility fee applicable to the revolving credit loan facility;
• the interest rate margin applicable to the revolving credit loan facility is now based on the credit rating
assigned to the loans under the credit agreement, with pricing currently at LIBOR + 3.00%;
• there is an undrawn fee of 0.625% per annum;
• the Company may incur a combination of additional term loan and revolver commitments so long as
total term loan and revolver commitments (including those currently outstanding) do not exceed $1.4
billion; and
• the negative pledge (i.e., a cap on first lien debt) of $3.0 billion.
Recourse Debt Covenants and Guarantees
Certain of the Company’s obligations under the senior secured credit facility are guaranteed by its direct
subsidiaries through which the Company owns its interests in the AES Shady Point, AES Hawaii, AES Warrior
Run and AES Eastern Energy businesses. The Company’s obligations under the senior secured credit facility are,
subject to certain exceptions, secured by:
(i) all of the capital stock of domestic subsidiaries owned directly by the Company and 65% of the capital
stock of certain foreign subsidiaries owned directly or indirectly by the Company; and
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(ii) certain intercompany receivables, certain intercompany notes and certain intercompany tax sharing
agreements.
The senior secured credit facility is subject to mandatory prepayment under certain circumstances, including
the sale of a guarantor subsidiary. In such a situation, the net cash proceeds from the sale of a Guarantor or any of
its subsidiaries must be applied pro rata to repay the term loan using 60% of net cash proceeds, reduced to 50%
when and if the parent’s recourse debt to cash flow ratio is less than 5:1. The lenders have the option to waive
their pro rata redemption.
The senior secured credit facility contains customary covenants and restrictions on the Company’s ability to
engage in certain activities, including, but not limited to, limitations on other indebtedness, liens, investments and
guarantees; limitations on restricted payments such as shareholder dividends and equity repurchases; restrictions
on mergers and acquisitions, sales of assets, leases, transactions with affiliates and off-balance sheet or derivative
arrangements; and other financial reporting requirements.
The senior secured credit facility also contains financial covenants requiring the Company to maintain
certain financial ratios including a cash flow to interest coverage ratio, calculated quarterly, which provides that a
minimum ratio of the Company’s adjusted operating cash flow to the Company’s interest charges related to
recourse debt of 1.3× must be maintained at all times and a recourse debt to cash flow ratio, calculated quarterly,
which provides that the ratio of the Company’s total recourse debt to the Company’s adjusted operating cash
flow must not exceed a maximum at any time of calculation, or 7.5× at December 31, 2010.
The terms of the Company’s senior unsecured notes and senior secured credit facility contain certain
covenants including, without limitation, limitation on the Company’s ability to incur liens or enter into sale and
leaseback transactions.
TERM CONVERTIBLE TRUST SECURITIES

Between 1999 and 2000, AES Trust III, a wholly owned special purpose business trust, issued
approximately 10.35 million of $3.375 Term Convertible Preferred Securities (“TECONS”) (liquidation value
$50) for total proceeds of $517 million and concurrently purchased $517 million of 6.75% Junior Subordinated
Convertible Debentures due 2029 (the “6.75% Debentures” of the Company). The TECONS are consolidated and
classified as long-term recourse debt on the Company’s Consolidated Balance Sheet.
AES, at its option, can redeem the 6.75% Debentures which would result in the required redemption of the
TECONS issued by AES Trust III, currently for $50 per TECON. The TECONS must be redeemed upon
maturity of the 6.75% Debentures. The TECONS are convertible into the common stock of AES at each holder’s
option prior to October 15, 2029 at the rate of 1.4216, representing a conversion price of $35.17 per share. The
maximum number of shares of common stock AES would be required to issue should all holders decide to
convert their securities would be 14.7 million shares.
Dividends on the TECONS are payable quarterly at an annual rate of 6.75%. The Trust is permitted to defer
payment of dividends for up to 20 consecutive quarters, provided that the Company has exercised its right to
defer interest payments under the corresponding debentures or notes. During such deferral periods, dividends on
the TECONS would accumulate quarterly and accrue interest, and the Company may not declare or pay
dividends on its common stock. AES has not exercised the option to defer any dividends at this time and all
dividends due under the Trust have been paid.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
AES Trust III is a VIE under the relevant consolidation accounting guidance. AES’ obligations under the
6.75% Debentures and other relevant trust agreements, in aggregate, constitute a full and unconditional guarantee
by AES of the TECON Trusts’ obligations. Accordingly, AES consolidates AES Trust III. As of December 31,
2010 and 2009, the sole assets of AES Trust III are the 6.75% Debentures.
11. COMMITMENTS
OPERATING LEASES—As of December 31, 2010, the Company was obligated under long-term
non-cancelable operating leases, primarily for certain transmission lines, office rental and site leases. Rental
expense for lease commitments under these operating leases for the years ended December 31, 2010, 2009 and
2008 was $58 million, $63 million and $74 million, respectively.
The table below sets forth the future minimum lease commitments under these operating leases as of
December 31, 2010 for 2011 through 2015 and thereafter:
Future
Commitments
for Operating
December 31, Leases
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 56
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $919
CAPITAL LEASES—Several AES subsidiaries lease operating and office equipment and vehicles that are
considered capital lease transactions. These capital leases are recognized in Property, Plant and Equipment within
“Electric generation and distribution assets” and primarily relate to transmission lines at our subsidiaries in
Brazil. The gross value of the leased assets as of December 31, 2010 and 2009 was $99 million and $106 million,
respectively.
The following table summarizes the future minimum lease payments under capital leases together with the
present value of the net minimum lease payments as of December 31, 2010 for 2011 through 2015 and thereafter:
Future Minimum
December 31, Lease Payments
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 17
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 142
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $206
Less: Imputed interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
Present value of total minimum lease payments . . . . . . . . . . . . . . $ 79
219
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
SALE/LEASEBACK—In May 1999, a subsidiary of the Company acquired six electric generating stations
from New York State Electric and Gas (“NYSEG”). Concurrently, the subsidiary sold two of the plants to an
unrelated third party for $666 million and simultaneously entered into a leasing arrangement with the unrelated
party. This transaction has been accounted for as a sale/leaseback with operating lease treatment. In May 2007,
the subsidiary purchased a portion of the lessor’s interest in a trust estate that holds the leased plants. Future
minimum lease commitments under the lease agreement are reduced by the subsidiary’s interest in the plants.
Rental expense was $34 million for each of the years ended December 31, 2010, 2009 and 2008.
The following table summarizes the future minimum lease commitments under the sale/leaseback
arrangement as of December 31, 2010 for 2011 through 2015 and thereafter:
Future Minimum
Lease
December 31, Commitments
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 43
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 437
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $664
CONTRACTS—Operating subsidiaries of the Company have entered into contracts for the purchase of
electricity from third parties that primarily include energy auction agreements at our Brazil subsidiaries with
extended terms from 2011 through 2042 and in some cases are subject to variable quantities or prices. Purchases
in the years ended December 31, 2010, 2009 and 2008 were approximately $2.4 billion, $2.1 billion and
$1.5 billion, respectively.
The table below sets forth the future minimum commitments under these electricity purchase contracts at
Future
Commitments
for Electricity
Purchase
December 31, Contracts
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3,055
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,273
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,845
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,569
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,642
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37,776
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $52,160
Operating subsidiaries of the Company have entered into various long-term contracts for the purchase of
fuel subject to termination only in certain limited circumstances and in some cases are subject to variable
quantities or prices. Purchases in the years ended December 31, 2010, 2009 and 2008 were $1.9 billion,
$1.3 billion and $1.3 billion, respectively.
220
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The table below sets forth the future minimum commitments under these fuel contracts as of December 31,
2010 for 2011 through 2015 and thereafter:
Future
Commitments
for Fuel
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,587
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,154
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 733
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 454
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,391
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,871
The Company’s subsidiaries have entered into other various long-term contracts. These contracts are mainly
for construction projects, service and maintenance, transmission of electricity and other operation services.
Payments under these contracts for the years ended December 31, 2010, 2009 and 2008 were $1.7 billion,
$2.8 billion and $1.9 billion, respectively.
The table below sets forth the future minimum commitments under these other purchase contracts as of
Future
Commitments
for Other
Purchase
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,628
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,357
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,246
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,540
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,212
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,057
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $21,040
12. CONTINGENCIES
ENVIRONMENTAL LIABILITIES
The Company will record liabilities when an environmental assessment indicates that remedial actions are
probable and that costs can be reasonably estimated. As of December 31, 2010, the Company has recognized
liabilities of $28 million for estimated environmental remediation costs and potential fines and penalties. These
are reported on the Consolidated Balance Sheet within “accrued and other liabilities” and “other long-term
liabilities.” Due to the uncertainties associated with environmental assessment and remediation activities, actual
future costs of compliance or remediation could be higher or lower than the amount currently accrued. Certain
expenditures many also be capitalized in accordance with the Company’s property, plant and equipment policies
and are excluded from environmental liabilities in accordance with accounting guidelines. Any capital
expenditures incurred of this nature would be incremental to amounts reserved.
221
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
ENVIRONMENTAL REGULATION
The Company is subject to numerous environmental laws and regulations in the jurisdictions in which it
operates. The Company expenses environmental regulation compliance costs as incurred unless the underlying
expenditure qualifies for capitalization under its property, plant and equipment policies. The Company faces
certain risks and uncertainties related to these environmental laws and regulations, including existing and
potential greenhouse gas (“GHG”) legislation or regulations, and actual or potential laws and regulations
pertaining to water discharges, waste management (including disposal of coal combustion byproducts), and
certain air emissions, such as SO2, NOX, particulate matter and mercury. Such risks and uncertainties could result
in increased capital expenditures or other compliance costs which could have a material adverse effect on certain
of our United States or international subsidiaries, and our consolidated results of operations. For further
information about environmental risks, see Item 1A.—Risk Factors, “Our businesses are subject to stringent
environmental laws and regulations,” “Our businesses are subject to enforcement initiatives from environmental
regulatory agencies,” and “Regulators, politicians, non-governmental organizations and other private parties
have expressed concern about greenhouse gas, or GHG, emissions and the potential risks associated with
climate change and are taking actions which could have a material adverse impact on our consolidated results of
operations, financial condition and cash flows.”
Legislation and Regulation of GHG Emissions

Currently in the United States there is no Federal legislation establishing mandatory GHG emissions
reduction programs (including CO2) affecting the electric power generation facilities of the Company’s
subsidiaries. There are numerous state programs regulating GHG emissions from electric power generation
facilities and there is a possibility that federal GHG legislation will be enacted within the next several years.
Further, the EPA has adopted regulations pertaining to GHG emissions and has announced its intention to
propose new regulations for electric generating units under Section 111 of the United States Clean Air Act
(“CAA”).
Potential United States Federal GHG Legislation. Federal legislation passed the United States House of
Representatives in 2009 that, if adopted, would impose a nationwide cap-and-trade program to reduce GHG
emissions. In the United States Senate, several different draft bills pertaining to GHG legislation have been
considered at various times since then, including comprehensive GHG legislation similar to the legislation that
passed the United States House of Representatives and more limited legislation focusing only on the utility and
electric generation industry. It is uncertain whether any such legislation or any new legislation pertaining to GHG
emissions will be voted on or passed by the Senate. If any legislation is passed by the Senate, it is uncertain
whether such legislation will be reconciled with the House of Representatives’ legislation and ultimately enacted
into law. However, if any such legislation is enacted, the impact could be material to the Company.
EPA GHG Regulation. The EPA promulgated regulations governing GHG emissions from automobiles
under the CAA. The effect of the EPA’s regulation of GHG emissions from mobile sources is that certain
provisions of the CAA will also apply to GHG emissions from existing stationary sources, including many
United States power plants. Beginning on January 2, 2011, construction of new stationary sources and
modifications to existing stationary sources that result in increased GHG emissions, became subject to permitting
requirements under the prevention of significant deterioration (“PSD”) program of the CAA. The PSD program,
as currently applicable to GHG emissions, requires sources that emit above a certain threshold of GHGs to obtain
PSD permits prior to commencement of new construction or modifications to existing facilities. In addition,
major sources of GHG emissions may be required to amend, or obtain new, Title V-air permits under the CAA to
reflect any new applicable GHG emissions requirements for new construction or for modifications to existing
facilities.
222
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The EPA promulgated a final rule on June 3, 2010, (the “Tailoring Rule”) that sets thresholds for GHG
emissions that would trigger PSD permitting requirements. The Tailoring Rule, which became effective in
January of 2011, provides that sources already subject to PSD permitting requirements need to install Best
Available Control Technology (“BACT”) for greenhouse gases if a proposed modification would result in the
increase of more than 75,000 tons per year of GHG emissions. Also, under the Tailoring Rule, commencing in
July of 2011, any new sources of GHG emissions that would emit over 100,000 tons per year of GHG emissions,
in addition to any modification that would result in GHG emissions exceeding 75,000 tons per year would
require PSD review and be subject to related permitting requirements. The EPA anticipates that it will adjust
downward the permitting thresholds of 100,000 tons and 75,000 tons for new sources and modifications,
respectively, in future rulemaking actions. The Tailoring Rule substantially reduces the number of sources
subject to PSD requirements for GHG emissions and the number of sources required to obtain Title V air permits,
although new thermal power plants may still be subject to PSD and Title V requirements because annual GHG
emissions from such plants typically far exceed the 100,000 ton threshold noted above. The 75,000 ton threshold
for increased GHG emissions from modifications to existing sources may reduce the likelihood that future
modifications to plants owned by some of our United States subsidiaries would trigger PSD requirements,
although some projects that would expand capacity or electric output are likely to exceed this threshold, and in
any such cases the capital expenditures necessary to comply with the PSD requirements could be significant.
In December 2010, the EPA entered into a settlement agreement with several states and environmental
groups to resolve a petition for review challenging EPA’s new source performance standards (“NSPS”)
rulemaking for electric utility steam generating units (“EUSGUs”) based on the NSPS’ failure to address GHG
emissions. Under the settlement agreement, the EPA has committed to propose GHG emissions standards for
EUSGUs by July 26, 2011 and to finalize GHG emissions standards for EUSGUs by May 26, 2012. The NSPS
will establish GHG emission standards for newly constructed and reconstructed EUSGUs. The NSPS also will
establish guidelines regarding the best system for achieving further GHG emissions reductions from EUSGUs
and, based on such guidelines, individual states will be required to submit a plan to the EPA to establish GHG
emission standards for existing EUSGUs within their state. It is impossible to estimate the impact and
compliance cost associated with any future NSPS applicable to EUSGUs until such regulations are finalized.
However, the compliance costs could have a material and adverse impact on our consolidated financial condition
or results of operations.
Regional Greenhouse Gas Initiative. The primary regulation of GHG emissions affecting the United States
plants of the Company’s subsidiaries has been through the Regional Greenhouse Gas Initiative (“RGGI”). Under
RGGI, ten Northeastern States have coordinated to establish rules that require reductions in CO2 emissions from
power plant operations within those states through a cap-and-trade program. States participating in RGGI in
which our subsidiaries have generating facilities include Connecticut, Maryland, New York and New Jersey.
Under RGGI, power plants must acquire one carbon allowance through auction or in the emission trading
markets for each ton of CO2 emitted.
In July 2003, the European Community “Directive 2003/87/EC on Greenhouse Gas Emission Allowance
Trading” was created, which requires member states to limit emissions of CO2 from large industrial sources
within their countries. To do so, member states are required to implement EC-approved national allocation plans
(“NAPs”). Under the NAPs, member states are responsible for allocating limited CO2 allowances within their
borders. Directive 2003/87/EC does not dictate how these allocations are to be made, and NAPs that have been
submitted thus far have varied in their allocation methodologies. For these and other reasons, uncertainty remains
with respect to the implementation of the European Union Emissions Trading System (“EU ETS”) that
commenced in January 2005. The European Union has announced that it intends to keep the EU ETS in place
after 2012, even if the Kyoto Protocol is not extended or replaced by another agreement. The Company’s
subsidiaries operate eight
223
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
electric power generation facilities, and another subsidiary has one under construction, within six member states
which have adopted NAPs to implement Directive 2003/87/EC. At this time, the Company cannot determine
fully whether achieving and maintaining compliance with the NAPs, to which its subsidiaries are subject, will
have a material impact on its consolidated operations or results. The risk and benefit associated with achieving
compliance with applicable NAPs at several facilities of the Company’s subsidiaries are not the responsibility of
the Company’s subsidiaries, as they are subject to contractual provisions that transfer the costs associated with
compliance to contract counterparties. However, one such contract counterparty, GDF-Suez, is currently
disputing these provisions with AES Energia Cartagena S.R.L. The matter has been submitted to arbitration and
the parties are currently awaiting a decision. See Item 3.—Legal Proceedings—in this Form 10-K for more detail
regarding this dispute. In connection with this dispute or any similar dispute that might arise with other contract
counterparties, there can be no assurance that the Company and/or the relevant subsidiary would prevail, or that
the failure to prevail in any such dispute will not have a material adverse effect on the Company and its financial
condition or consolidated results of operations.
On February 16, 2005, the Kyoto Protocol became effective. The Kyoto Protocol requires the industrialized
countries that have ratified it to significantly reduce their GHG emissions, including CO2. The vast majority of
developing countries which have ratified the Kyoto Protocol have no GHG reduction requirements, including
many of the countries in which the Company’s subsidiaries operate. Of the 28 countries in which the Company’s
subsidiaries currently operate all but one—the United States (including Puerto Rico)—have ratified the Kyoto
Protocol.
In addition to the risks and uncertainties related to GHG regulations or potential legislation, the Company
faces certain risks and uncertainties related to regulations or legislation concerning other types of air emissions.
In the United States the CAA and various state laws and regulations regulate emissions of air pollutants,
including SO2, NOX, particulate matter (“PM”), mercury and other hazardous air pollutants (“HAPs”). The
applicable rules and steps taken by the Company to comply with the rules are discussed in further detail below.
The EPA promulgated the “Clean Air Interstate Rule” (“CAIR”) on March 10, 2005, which required allowance
surrender for SO2 and NOX, emissions from existing power plants located in 28 eastern states and the District of
Columbia. CAIR was subsequently challenged in federal court on July 11, 2008 and the United States Court of
Appeals for the D.C. Circuit issued an opinion striking down much of CAIR and remanding it to the EPA.
In response to the D.C. Circuit’s opinion, on July 6, 2010, the EPA issued a new proposed rule (the
“Transport Rule”) to replace CAIR. The final Transport Rule is scheduled to be issued by July 2011. The Clean
Air Transport Rule would require significant reductions in SO2 and NOX emissions in 31 states and the District of
Columbia starting in 2012, including several states where subsidiaries of the Company conduct business.
The Transport Rule contemplates three possible options for reducing SO2 and NOX emissions in the
designated states. The EPA’s preferred option contemplates a set limit or budget on SO2 and NOX emissions for
each of the states, with limited interstate trading of emissions allowances and unlimited intrastate trading of SO2
and NOX emissions allowances. Affected power plants would receive emissions allowances based on the
applicable state emissions budgets. The EPA’s second option under the Transport Rule would establish emission
budgets for each state but only allow intrastate trading of emissions allowances. The final option would set
emission rate limitations for each power plant but would allow for some intrastate averaging of emission rates.
Under any of the proposed options, additional air emission control technology may be required by some of our
subsidiaries, and the cost of implementing any such technology could affect the financial condition or results of
operations of these subsidiaries or the Parent Company. The EPA has received public comments on the Transport
Rule, and such public comments will be considered by the EPA prior to promulgating a final rule.
224
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
As a result of prior EPA determinations and a D.C. Circuit Court ruling, the EPA is obligated under
Section 112 of the CAA to develop a rule requiring pollution controls for hazardous air pollutants, including
mercury, hydrogen chloride, hydrogen fluoride, and nickel species from coal and oil-fired power plants. The EPA
has entered into a consent decree under which it is obligated to propose the rule by March 2011 and to finalize
the rule by November 2011. In connection with such rule, the CAA requires the EPA to establish maximum
achievable control technology (“MACT”) standards for each pollutant regulated under the rule. MACT is defined
as the emission limitation achieved by the “best performing 12%” of sources in the source category. While it is
impossible to project what emission rate levels the EPA may propose as MACT, the rule may require all coal-
fired power plants to install acid gas scrubbers (wet or dry flue gas desulfurization technology) and/or some other
type of mercury control technology, such as sorbent injection. Most of the Company’s United States coal-fired
plants have acid gas scrubbers or comparable control technologies, but it is possible that EPA regulations will
require improvements to such control technologies at some of our plants. Under the CAA, compliance is required
within three years of the effective date of the rule; however, the compliance period for a unit, or group of units,
may be extended by state permitting authorities (for one additional year) or through a determination by the
President (for up to two additional years). At this time, the Company cannot predict whether new regulations for
hazardous air pollutants will be promulgated or, if promulgated, the extent of such regulations, but the cost of
compliance with any such regulations could be material.
In July 1999, the EPA published the “Regional Haze Rule” to reduce haze and protect visibility in
designated federal areas. On June 15, 2005, the EPA proposed amendments to the Regional Haze Rule that,
among other things, set guidelines for determining when to require the installation of “best available retrofit
technology” (“BART”) at older plants. The amendment to the Regional Haze Rule required states to consider the
visibility impacts of the haze produced by an individual facility, in addition to other factors, when determining
whether that facility must install potentially costly emissions controls. States were required to submit their
regional haze state implementation plans (“SIPs”) to the EPA by December 2007, but only 13 states met this
deadline. The EPA has yet to approve any state’s Regional Haze state implementation plan. The statute requires
compliance within five years after the EPA approves the relevant SIP, although individual states may impose
more stringent compliance schedules.
In Europe, the Company is, and will continue to be, required to reduce air emissions from our facilities to
comply with applicable EC Directives, including Directive 2001/80/EC on the limitation of emissions of certain
pollutants into the air from large combustion plants (the “LCPD”), which sets emission limit values for NOX,
SO2, and particulate matter for large-scale industrial combustion plants for all member states. Until June 2004,
existing coal plants could “opt-in” or “opt-out” of the LCPD emissions standards. Those plants that opted out
will be required to cease all operations by 2015 and may not operate for more than 20,000 hours after 2008.
Those that opted-in, like the Company’s AES Kilroot facility in the United Kingdom, must invest in abatement
technology to achieve specific SO2 reductions. Kilroot installed a new flue gas desulphurization system in the
second quarter of 2009 in order to satisfy SO2 reduction requirements. The Company’s other coal plants in
Europe are either exempt from the Directive due to their size or have opted-in but will not require any additional
abatement technology to comply with the LCPD.
On January 18 2011, the President of Chile approved a new air emissions regulation submitted to him by the
national environmental regulatory agency (“CONAMA”). The new regulation establishes limits on emissions of
NOX, SO2, metals and particulate matter for both existing and new thermal power plants, with more stringent
limitations on new facilities. The regulation will become effective upon approval of the General Comptroller of
Chile. The regulation will require AES Gener, our Chilean subsidiary, to install emissions reduction equipment at
its existing thermal plants from late 2011 through 2015. The exact costs of compliance with such regulation have
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not yet been determined and the Company believes some of the compliance costs are contractually passed
through to counterparties. However, the compliance costs could be material.
Water Discharges
The Company also faces certain risks and uncertainties related to environmental laws and regulations
pertaining to water discharge. The Company’s facilities are subject to a variety of rules governing water
discharges. In particular, the Company is subject to the United States Clean Water Act Section 316(b) rule
regarding existing power plant cooling water intake structures issued by the EPA in 2005 (69 Fed. Reg. 41579,
July 9, 2004), and the subsequent Circuit Court of Appeals decision and Supreme Court decision regarding this
rule. The rule as originally issued could affect 12 of the Company’s United States power plants and the rule’s
requirements would be implemented via each plant’s National Pollutant Discharge Elimination System
(“NPDES”) water quality permit renewal process. These permits are usually processed by state water quality
agencies. To protect fish and other aquatic organisms, the 2004 rule requires existing steam electric generating
facilities to utilize the best technology available for cooling water intake structures. To comply, a steam electric
generating facility must first prepare a Comprehensive Demonstration Study to assess the facility’s effect on the
local aquatic environment. Since each facility’s design, location, existing control equipment and results of impact
assessments must be taken into consideration, costs will likely vary. The timing of capital expenditures to
achieve compliance with this rule will vary from site to site. On January 25, 2007, the United States Court of
Appeals for the Second Circuit decision (Docket Nos. 04-6692 to 04-6699) vacated and remanded major parts of
the 2004 rule back to the EPA. In November 2007, three industry petitioners sought review of the Second
Circuit’s decision by the United States Supreme Court, and this review was granted by the United States
Supreme Court in April 2008. In its April 2009 decision, the United States Supreme Court granted the EPA
authority to use a cost-benefit analysis when setting technology-based requirements under Section 316(b) of the
Clean Water Act, and expressed no view on the remaining bases for the Second Circuit’s remand. New draft rule
316(b) regulations are expected to be proposed by the EPA by March 14, 2011, and finalized by July 27, 2010.
Until such regulations are final, the EPA has instructed state regulatory agencies to use their best professional
judgment in determining how to evaluate what constitutes best technology available for minimizing adverse
environmental impacts from cooling water intake structures. Certain states in which the Company operates power
generation facilities, such as New York, have been delegated authority and are moving forward with best
technology available determinations in the absence of any final rule from the EPA. On September 27, 2010, the
California Office of Administrative Law approved a policy adopted by the California Water Resources Control
Board with respect to power plant cooling water intake structures. This policy became effective on October 1,
2010 and establishes technology-based standards to implement Section 316(b) of the United States Clean Water
Act. At this time, it is contemplated that the Company’s Redondo Beach, Huntington Beach and Alamitos power
plants in California will need to have in place “best technology available” by December 31, 2020, or repower the
facilities. At present, the Company cannot predict the final requirements under Section 316(b) or whether
compliance with the anticipated new 316(b) rule will have a material impact on our operations or results, but the
Company expects that capital investments and/or modifications resulting from such requirements could be
significant.
Waste Management
The Company also faces certain risks and uncertainties related to environmental laws and regulations
pertaining to waste management. In the course of operations, the Company’s facilities generate solid and liquid
waste materials requiring eventual disposal or processing. With the exception of coal combustion byproducts
(“CCB”), the wastes are not usually physically disposed of on our property, but are shipped off site for final
disposal, treatment or recycling. CCB, which consists of bottom ash, fly ash and air pollution control wastes, is
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disposed of at some of our coal-fired power generation plant sites using engineered, permitted landfills. Waste
materials generated at our electric power and distribution facilities include CCB, oil, scrap metal, rubbish, small
quantities of industrial hazardous wastes such as spent solvents, tree and land clearing wastes and
polychlorinated biphenyl contaminated liquids and solids. The Company endeavors to ensure that all of its solid
and liquid wastes are disposed of in accordance with applicable national, regional, state and local regulations. On
December 22, 2009, a dike at a coal ash containment area at the Tennessee Valley Authority’s plant in Kingston,
Tennessee failed, and over 1 billion gallons of ash was released into adjacent waterways and properties.
Following such incident, there has been heightened focus on the regulation of CCBs. On June 21, 2010, the EPA
published in the Federal Register a proposed rule to regulate CCB under the Resource Conservation and
Recovery Act (“RCRA”). The proposed rule provides two possible options for CCB regulation, both options
contemplate heightened structural integrity requirements for surface impoundments of CCB.
The first option contemplates regulation of CCB as a hazardous waste subject to regulation under Subtitle C
of the RCRA. Under this option, existing surface impoundments containing CCB would be required to be
retrofitted with composite liners and these impoundments would likely be phased out over several years. State
and/or federal permit programs would be developed for storage, transport and disposal of CCB. States could
bring enforcement actions for non-compliance with permitting requirements, and the EPA would have oversight
responsibilities as well as the authority to bring lawsuits for non-compliance.
The second option contemplates regulation of CCB under Subtitle D of the RCRA. Under this option, the
EPA would create national criteria applicable to CCB landfills and surface impoundments. Existing
impoundments would also be required to be retrofitted with composite liners and would likely be phased out over
several years. This option would not contain federal or state permitting requirements. The primary enforcement
mechanism under regulation pursuant to Subtitle D would be private lawsuits.
The public comment period for this proposed regulation has expired, and the EPA is required to consider the
public comments prior to promulgating a final rule. Requirements under a final rule are expected to become
effective by January 2012, with a compliance schedule of five years. While the exact impact and compliance cost
associated with future regulations of CCB cannot be established until such regulations are finalized, there can be
no assurance that the Company’s businesses, financial condition or results of operations would not be materially
and adversely affected by such regulations.
GUARANTEES, LETTERS OF CREDIT

In connection with certain project financing, acquisition, power purchase and other agreements, AES has
expressly undertaken limited obligations and commitments, most of which will only be effective or will be
terminated upon the occurrence of future events. In the normal course of business, AES has entered into various
agreements, mainly guarantees and letters of credit, to provide financial or performance assurance to third parties
on behalf of AES businesses. These agreements are entered into primarily to support or enhance the
creditworthiness otherwise achieved by a business on a stand-alone basis, thereby facilitating the availability of
sufficient credit to accomplish their intended business purposes. Most of the contingent obligations primarily
relate to future performance commitments which the Company or its businesses expect to fulfill within the
normal course of business. The expiration dates of these guarantees vary from less than one year to more than
16 years. In addition to the contingent obligations of the Parent Company identified in the table below, the
Company’s subsidiaries had letters of credit outstanding to support various contingent obligations.
The following table summarizes the Parent Company’s contingent contractual obligations as of
December 31, 2010. Amounts presented in the table below represent the Parent Company’s current undiscounted
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exposure to guarantees and the range of maximum undiscounted potential exposure. The maximum exposure is
not reduced by the amounts, if any, that could be recovered under the recourse or collateralization provisions in
the guarantees. The amounts include obligations made by the Parent Company for the direct benefit of the
lenders associated with the non-recourse debt of businesses of $101 million.
Maximum
Exposure
Range for
Number of Each
Contingent contractual obligations Amount Agreements Agreement
Guarantees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $415 24 <$1 - $62
Letters of credit under the senior secured credit facility . . . . . . . . . . . . . . . . 85 30 <$1 - $26
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $500 54
The risks associated with these obligations include change of control, construction cost overruns, political
risk, tax indemnities, spot market power prices, sponsor support and liquidated damages under power purchase
agreements and other agreements for projects in development, under construction and operating. While the
Company does not expect to be required to fund any material amounts under these contingent contractual
obligations during 2011 or beyond that are not recognized on the Consolidated Balance Sheet, many of the events
which would give rise to such an obligation are beyond the Parent Company’s control. There can be no assurance
that the Parent Company would have adequate sources of liquidity to fund its obligations under these contingent
contractual obligations if it were required to make substantial payments thereunder.
During 2010, the Company paid letter of credit fees ranging from 3.19% to 3.75% per annum on the
outstanding amounts of letters of credit.
LITIGATION
The Company is involved in certain claims, suits and legal proceedings in the normal course of business,
some of which are described below. The Company has accrued for litigation and claims where it is probable that
a liability has been incurred and the amount of loss can be reasonably estimated. The Company has evaluated
claims in accordance with the accounting guidance for contingencies that it deems both probable and reasonably
estimable and accordingly, has recorded aggregate reserves for all claims for approximately $450 million and
$482 million as of December 31, 2010 and 2009. These are reported on the Consolidated Balance Sheet within
“accrued and other liabilities” and “other long-term liabilities.” A significant portion of these reserves relate to
employment, non-income tax and customer disputes in international jurisdictions, principally Brazil. Certain of
the Company’s subsidiaries, principally in Brazil, are defendants in a number of labor and employment lawsuits.
The complaints generally seek unspecified monetary damages, injunctive relief or other relief. The subsidiaries
have denied any liability and intend to vigorously defend themselves in all of these proceedings. There can be no
assurance that this reserve will be adequate to cover all existing and future claims or that we will have the
liquidity to pay such claims as they arise.
The Company believes, based upon information it currently possesses and taking into account established
reserves for liabilities and its insurance coverage, that the ultimate outcome of these proceedings and actions is
unlikely to have a material effect on the Company’s financial statements. However, even where no reserve has
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been recognized, it is reasonably possible that some matters could be decided unfavorably to the Company, and
could require the Company to pay damages or make expenditures in amounts that could be material.
In 1989, Centrais Elétricas Brasileiras S.A. (“Eletrobrás”) filed suit in the Fifth District Court in the State of
Rio de Janeiro against Eletropaulo Eletricidade de São Paulo S.A. (“EEDSP”) relating to the methodology for
calculating monetary adjustments under the parties’ financing agreement. In April 1999, the Fifth District Court
found for Eletrobrás and in September 2001, Eletrobrás initiated an execution suit in the Fifth District Court to
collect approximately R$1.10 billion ($659 million) from Eletropaulo (as estimated by Eletropaulo) and a lesser
amount from an unrelated company, Companhia de Transmissão de Energia Elétrica Paulista (“CTEEP”)
(Eletropaulo and CTEEP were spun off from EEDSP pursuant to its privatization in 1998). In November 2002,
the Fifth District Court rejected Eletropaulo’s defenses in the execution suit. Eletropaulo appealed and in
September 2003, the Appellate Court of the State of Rio de Janeiro (“AC”) ruled that Eletropaulo was not a
proper party to the litigation because any alleged liability had been transferred to CTEEP pursuant to the
privatization. In June 2006, the Superior Court of Justice (“SCJ”) reversed the Appellate Court’s decision and
remanded the case to the Fifth District Court for further proceedings, holding that Eletropaulo’s liability, if any,
should be determined by the Fifth District Court. Eletropaulo’s subsequent appeals to the Special Court (the
highest court within the SCJ) and the Supreme Court of Brazil were dismissed. Eletrobrás later requested that the
amount of Eletropaulo’s alleged debt be determined by an accounting expert appointed by the Fifth District
Court. Eletropaulo consented to the appointment of such an expert, subject to a reservation of rights. In February
2010, the Fifth District Court appointed an accounting expert to determine the amount of the alleged debt and the
responsibility for its payment in light of the privatization, in accordance with the methodology proposed by
Eletrobrás. Pursuant to its reservation of rights, Eletropaulo filed an interlocutory appeal with the AC asserting
that the expert was required to determine the issues in accordance with the methodology proposed by
Eletropaulo, and that Eletropaulo should be entitled to take discovery and present arguments on the issues to be
determined by the expert. In April 2010, the AC issued a decision agreeing with Eletropaulo’s arguments and
directing the Fifth District Court to proceed accordingly. Eletrobrás may restart the accounting proceedings at the
Fifth District Court at any time, which would proceed according to the AC’s April 2010 decision. In the Fifth
District Court proceedings, the expert’s conclusions will be subject to the Fifth District Court’s review and
approval. If Eletropaulo is determined to be responsible for the debt, after the amount of the alleged debt is
determined, Eletrobrás will be entitled to resume the execution suit in the Fifth District Court at any time. If
Eletrobrás does so, Eletropaulo will be required to provide security in the amount of its alleged liability. In that
case, if Eletrobrás requests the seizure of such security and the Fifth District Court grants such request,
Eletropaulo’s results of operations may be materially adversely affected, and in turn the Company’s results of
operations could be materially adversely affected. In addition, in February 2008, CTEEP filed a lawsuit in the
Fifth District Court against Eletrobrás and Eletropaulo seeking a declaration that CTEEP is not liable for any
debt under the financing agreement. The parties are disputing the proper venue for the CTEEP lawsuit.
Eletropaulo believes it has meritorious defenses to the claims asserted against it and will defend itself vigorously
in these proceedings; however, there can be no assurances that it will be successful in its efforts.
In August 2000, the FERC announced an investigation into the organized California wholesale power markets
to determine whether rates were just and reasonable. Further investigations involved alleged market manipulation.
FERC requested documents from each of the AES Southland, LLC plants and AES Placerita, Inc. AES Southland
and AES Placerita have cooperated fully with the FERC investigations. AES Southland was not subject to refund
liability because it did not sell into the organized spot markets due to the nature of its tolling agreement. After
hearings at FERC, AES Placerita was found subject to refund liability of $588,000 plus interest for spot sales to the
California Power Exchange from October 2, 2000 to June 20, 2001. As FERC investigations and hearings
progressed, numerous appeals on related issues were filed with the U.S. Court of Appeals for the Ninth Circuit.
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Over the years, the Ninth Circuit issued several opinions that had the potential to expand the scope of the FERC
proceedings and increase refund exposure for AES Placerita and other sellers of electricity. Following remand of
one of the Ninth Circuit appeals in March 2009, FERC started a new hearing process involving AES Placerita and
other sellers. In May 2009, AES Placerita entered into a settlement, approved by FERC in July 2009, concerning the
claims before FERC against AES Placerita relating to the California energy crisis of 2000-2001, including the
California refund proceeding. Pursuant to the settlement, AES Placerita paid $6 million and assigned a receivable of
$168,119 due to it from the California Power Exchange in return for a release of all claims against it at FERC by the
settling parties and other consideration. More than 98% of the buyers in the market elected to join the settlement. A
small amount of AES Placerita’s settlement payment was placed in escrow for buyers that did not join the
settlement (“non-settling parties”). It is unclear whether the escrowed funds will be enough to satisfy any additional
sums that might be determined to be owed to non-settling parties at the conclusion of the FERC proceedings
concerning the California energy crisis. However, any such additional sums are expected to be immaterial to the
Company’s consolidated financial statements. In November 2009, one non-settling party, the Sacramento Municipal
Utility District (“SMUD”), filed an appeal of the FERC’s approval of the settlement which is pending in the Ninth
Circuit. SMUD’s appeal has been stayed pending further order of the court. The settlement agreement is still
effective and will continue to remain effective unless it is vacated by the Ninth Circuit. SMUD has reached a
settlement in principal with buyers of electricity that, if approved by FERC, will leave only immaterial claims of
non-settling parties against AES Placerita.
In August 2001, the Grid Corporation of Orissa, India, now Gridco Ltd. (“Gridco”), filed a petition against
the Central Electricity Supply Company of Orissa Ltd. (“CESCO”), an affiliate of the Company, with the Orissa
Electricity Regulatory Commission (“OERC”), alleging that CESCO had defaulted on its obligations as an
OERC-licensed distribution company, that CESCO management abandoned the management of CESCO, and
asking for interim measures of protection, including the appointment of an administrator to manage CESCO.
Gridco, a state-owned entity, is the sole wholesale energy provider to CESCO. Pursuant to the OERC’s
August 2001 order, the management of CESCO was replaced with a government administrator who was
appointed by the OERC. The OERC later held that the Company and other CESCO shareholders were not
necessary or proper parties to the OERC proceeding. In August 2004, the OERC issued a notice to CESCO, the
Company and others giving the recipients of the notice until November 2004 to show cause why CESCO’s
distribution license should not be revoked. In response, CESCO submitted a business plan to the OERC. In
February 2005, the OERC issued an order rejecting the proposed business plan. The order also stated that the
CESCO distribution license would be revoked if an acceptable business plan for CESCO was not submitted to
and approved by the OERC prior to March 31, 2005. In its April 2, 2005 order, the OERC revoked the CESCO
distribution license. CESCO has filed an appeal against the April 2, 2005 OERC order and that appeal remains
pending in the Indian courts. In addition, Gridco asserted that a comfort letter issued by the Company in
connection with the Company’s indirect investment in CESCO obligates the Company to provide additional
financial support to cover all of CESCO’s financial obligations to Gridco. In December 2001, Gridco served a
notice to arbitrate pursuant to the Indian Arbitration and Conciliation Act of 1996 on the Company, AES Orissa
Distribution Private Limited (“AES ODPL”), and Jyoti Structures (“Jyoti”) pursuant to the terms of the CESCO
Shareholders Agreement between Gridco, the Company, AES ODPL, Jyoti and CESCO (the “CESCO
arbitration”). In the arbitration, Gridco appeared to be seeking approximately $189 million in damages, plus
undisclosed penalties and interest, but a detailed alleged damage analysis was not filed by Gridco. The Company
counterclaimed against Gridco for damages. In June 2007, a 2-to-1 majority of the arbitral tribunal rendered its
award rejecting Gridco’s claims and holding that none of the respondents, the Company, AES ODPL, or Jyoti,
had any liability to Gridco. The respondents’ counterclaims were also rejected. In September 2007, Gridco filed a
challenge of the arbitration award with the local Indian court. In June 2008, Gridco filed a separate application
with the local Indian court for an order enjoining the Company from selling or otherwise transferring its shares in
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Orissa Power Generation Corporation Ltd.’s (“OPGC”), an equity method investment, and requiring the
Company to provide security in the amount of the contested damages in the CESCO arbitration until Gridco’s
challenge to the arbitration award is resolved. In June 2010, a 2-to-1 majority of the arbitral tribunal awarded the
Company some of its costs relating to the arbitration. In August 2010, Gridco filed a challenge of the cost award
with the local Indian court. The Company believes that it has meritorious defenses to the claims asserted against
it and will defend itself vigorously in these proceedings; however, there can be no assurances that it will be
successful in its efforts.
In early 2002, Gridco made an application to the OERC requesting that the OERC initiate proceedings
regarding the terms of OPGC’s existing PPA with Gridco. In response, OPGC filed a petition in the Indian courts to
block any such OERC proceedings. In early 2005, the Orissa High Court upheld the OERC’s jurisdiction to initiate
such proceedings as requested by Gridco. OPGC appealed that High Court’s decision to the Supreme Court and
sought stays of both the High Court’s decision and the underlying OERC proceedings regarding the PPAs terms. In
April 2005, the Supreme Court granted OPGC’s requests and ordered stays of the High Court’s decision and the
OERC proceedings with respect to the PPA’s terms. The matter is awaiting further hearing. Unless the Supreme
Court finds in favor of OPGC’s appeal or otherwise prevents the OERC’s proceedings regarding the PPA’s terms,
the OERC will likely lower the tariff payable to OPGC under the PPA, which would have an adverse impact on
OPGC’s financials. OPGC believes that it has meritorious claims and defenses and will assert them vigorously in
these proceedings; however, there can be no assurances that it will be successful in its efforts.
In March 2003, the office of the Federal Public Prosecutor for the State of São Paulo, Brazil (“MPF”)
notified AES Eletropaulo that it had commenced an inquiry related to the BNDES financings provided to AES
Elpa and AES Transgás and the rationing loan provided to Eletropaulo, changes in the control of Eletropaulo,
sales of assets by Eletropaulo and the quality of service provided by Eletropaulo to its customers, and requested
various documents from Eletropaulo relating to these matters. In July 2004, the MPF filed a public civil lawsuit
in the Federal Court of São Paulo (“FSCP”) alleging that BNDES violated Law 8429/92 (the Administrative
Misconduct Act) and BNDES’s internal rules by: (1) approving the AES Elpa and AES Transgás loans;
(2) extending the payment terms on the AES Elpa and AES Transgás loans; (3) authorizing the sale of
Eletropaulo’s preferred shares at a stock-market auction; (4) accepting Eletropaulo’s preferred shares to secure
the loan provided to Eletropaulo; and (5) allowing the restructurings of Light Serviços de Eletricidade S.A. and
Eletropaulo. The MPF also named AES Elpa and AES Transgás as defendants in the lawsuit because they
allegedly benefited from BNDES’s alleged violations. In May 2006, the FCSP ruled that the MPF could pursue
its claims based on the first, second, and fourth alleged violations noted above. The MPF subsequently filed an
interlocutory appeal with the Federal Court of Appeals (“FCA”) seeking to require the FCSP to consider all five
alleged violations. Also, in July 2006, AES Elpa and AES Transgás filed an interlocutory appeal with the FCA,
which was subsequently consolidated with the MPF’s interlocutory appeal, seeking a transfer of venue and to
enjoin the FCSP from considering any of the alleged violations. In June 2009, the FCA granted the injunction
sought by AES Elpa and AES Transgás and transferred the case to the Federal Court of Rio de Janeiro. In May
2010, the MPF filed an appeal with the Superior Court of Justice challenging the transfer. The MPF’s lawsuit
before the FCSP has been stayed pending a final decision on the interlocutory appeals. AES Elpa and AES
Brasiliana (the successor of AES Transgás) believe they have meritorious defenses to the allegations asserted
against them and will defend themselves vigorously in these proceedings; however, there can be no assurances
that they will be successful in their efforts.
AES Florestal, Ltd. (“Florestal”), had been operating a pole factory and had other assets, including a wooded
area known as “Horto Renner,” in the State of Rio Grande do Sul, Brazil (collectively, “Property”). Florestal had
been under the control of AES Sul (“Sul”) since October 1997, when Sul was created pursuant to a privatization by
the Government of the State of Rio Grande do Sul. After it came under the control of Sul, Florestal performed an
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environmental audit of the entire operational cycle at the pole factory. The audit discovered 200 barrels of solid
creosote waste and other contaminants at the pole factory. The audit concluded that the prior operator of the pole
factory, Companhia Estadual de Energia Elétrica (“CEEE”), had been using those contaminants to treat the poles
that were manufactured at the factory. Sul and Florestal subsequently took the initiative of communicating with
Brazilian authorities, as well as CEEE, about the adoption of containment and remediation measures. The Public
Attorney’s Office has initiated a civil inquiry (Civil Inquiry n. 24/05) to investigate potential civil liability and has
requested that the police station of Triunfo institute a police investigation (IP number 1041/05) to investigate
potential criminal liability regarding the contamination at the pole factory. The parties filed defenses in response to
the civil inquiry. The Public Attorney’s Office then requested an injunction which the judge rejected on
September 26, 2008. The Public Attorney’s office has a right to appeal the decision. The environmental agency
(“FEPAM”) has also started a procedure (Procedure n. 088200567/059) to analyze the measures that shall be taken
to contain and remediate the contamination. Also, in March 2000, Sul filed suit against CEEE in the 2nd Court of
Public Treasure of Porto Alegre seeking to register in Sul’s name the Property that it acquired through the
privatization but that remained registered in CEEE’s name. During those proceedings, AES subsequently waived its
claim to re-register the Property and asserted a claim to recover the amounts paid for the Property. That claim is
pending. In November 2005, the 7th Court of Public Treasure of Porto Alegre ruled that the Property must be
returned to CEEE. CEEE has had sole possession of Horto Renner since September 2006 and of the rest of the
Property since April 2006. In February 2008, Sul and CEEE signed a “Technical Cooperation Protocol” pursuant to
which they requested a new deadline from FEPAM in order to present a proposal. In March 2008, the State
Prosecution office filed a Public Class Action against AES Florestal, AES Sul and CEEE, requiring an injunction
for the removal of the alleged sources of contamination and the payment of an indemnity in the amount of R$6
million ($4 million). The injunction was rejected and the case is in the evidentiary stage awaiting the judge’s
determination concerning the production of expert evidence. The above-referenced proposal was delivered on
April 8, 2008. FEPAM responded by indicating that the parties should undertake the first step of the proposal which
would be to retain a contractor. In its response, Sul indicated that such step should be undertaken by CEEE as the
relevant environmental events resulted from CEEE’s operations. It is estimated that remediation could cost
approximately R$14.7 million ($9 million). Discussions between Sul and CEEE are ongoing.
In January 2004, the Company received notice of a “Formulation of Charges” filed against the Company by
the Superintendence of Electricity of the Dominican Republic. In the “Formulation of Charges,” the
Superintendence asserts that the existence of three generation companies (Empresa Generadora de Electricidad
Itabo, S.A. (“Itabo”), Dominican Power Partners, and AES Andres BV) and one distribution company (Empresa
Distribuidora de Electricidad del Este, S.A. (“Este”)) in the Dominican Republic, violates certain cross-
ownership restrictions contained in the General Electricity Law of the Dominican Republic. In February 2004,
the Company filed in the First Instance Court of the National District of the Dominican Republic an action
seeking injunctive relief based on several constitutional due process violations contained in the “Formulation of
Charges” (“Constitutional Injunction”). In February 2004, the Court granted the Constitutional Injunction and
ordered the immediate cessation of any effects of the “Formulation of Charges,” and the enactment by the
Superintendence of Electricity of a special procedure to prosecute alleged antitrust complaints under the General
Electricity Law. In March 2004, the Superintendence of Electricity appealed the Court’s decision. In July 2004,
the Company divested any interest in Este. The Superintendence of Electricity’s appeal is pending. The Company
believes it has meritorious defenses to the claims asserted against it and will defend itself vigorously in these
proceedings; however, there can be no assurances that it will be successful in its efforts.
In July 2004, the Corporación Dominicana de Empresas Eléctricas Estatales (“CDEEE”) filed lawsuits
against Itabo, an affiliate of the Company, in the First and Fifth Chambers of the Civil and Commercial Court of
First Instance for the National District. CDEEE alleges in both lawsuits that Itabo spent more than was necessary
to rehabilitate two generation units of an Itabo power plant and, in the Fifth Chamber lawsuit, that those funds
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were paid to affiliates and subsidiaries of AES Gener and Coastal Itabo, Ltd. (“Coastal”), a former shareholder of
Itabo, without the required approval of Itabo’s board of administration. In the First Chamber lawsuit, CDEEE
seeks an accounting of Itabo’s transactions relating to the rehabilitation. In November 2004, the First Chamber
dismissed the case for lack of legal basis. On appeal, in October 2005 the Court of Appeals of Santo Domingo
ruled in Itabo’s favor, reasoning that it lacked jurisdiction over the dispute because the parties’ contracts
mandated arbitration. The Supreme Court of Justice is considering CDEEE’s appeal of the Court of Appeals’
decision. In the Fifth Chamber lawsuit, which also names Itabo’s former president as a defendant, CDEEE seeks
$15 million in damages and the seizure of Itabo’s assets. In October 2005, the Fifth Chamber held that it lacked
jurisdiction to adjudicate the dispute given the arbitration provisions in the parties’ contracts. The First Chamber
of the Court of Appeal ratified that decision in September 2006. In a related proceeding, in May 2005, Itabo filed
a lawsuit in the U.S. District Court for the Southern District of New York seeking to compel CDEEE to arbitrate
its claims. The petition was denied in July 2005. Itabo’s appeal of that decision to the U.S. Court of Appeals for
the Second Circuit has been stayed since September 2006. Further, in September 2006, in an International
Chamber of Commerce arbitration, an arbitral tribunal determined that it lacked jurisdiction to decide arbitration
claims concerning these disputes. Itabo believes it has meritorious claims and defenses and will assert them
In April 2006, a putative class action was filed in the U.S. District Court for the Southern District of
Mississippi (“District Court”) on behalf of certain individual plaintiffs and all residents and/or property owners in
the State of Mississippi who allegedly suffered harm as a result of Hurricane Katrina, and against the Company and
numerous unrelated companies, whose alleged greenhouse gas emissions contributed to alleged global warming
which, in turn, allegedly increased the destructive capacity of Hurricane Katrina. The plaintiffs assert unjust
enrichment, civil conspiracy/aiding and abetting, public and private nuisance, trespass, negligence, and fraudulent
misrepresentation and concealment claims against the defendants. The plaintiffs seek damages relating to loss of
property, loss of business, clean-up costs, personal injuries and death, but do not quantify their alleged damages. In
August 2007, the District Court dismissed the case. The plaintiffs subsequently appealed to the U.S. Court of
Appeals for the Fifth Circuit, which, in October 2009, affirmed the District Court’s dismissal of the plaintiffs’ unjust
enrichment, fraudulent misrepresentation, and civil conspiracy claims. However, the Fifth Circuit reversed the
District Court’s dismissal of the plaintiffs’ public and private nuisance, trespass, and negligence claims, and
remanded those claims to the District Court for further proceedings. In February 2010, the Fifth Circuit granted the
petitions for en banc rehearing filed by the Company and other defendants, and thereby vacated its October 2009
decision. In May 2010, the Fifth Circuit dismissed the appeal on the ground that it had lost its quorum for en banc
review. In August 2010, the plaintiffs filed a petition for a writ of mandamus in the U.S. Supreme Court, requesting
the Supreme Court to direct the Fifth Circuit to reinstate the appeal and return it to the panel that issued the October
2009 decision. In January 2011, the Supreme Court denied the petition, ending the case.
In July 2007, the Competition Committee of the Ministry of Industry and Trade of the Republic of
Kazakhstan (the “Competition Committee”) ordered Nurenergoservice, an AES subsidiary, to pay approximately
KZT 18 billion ($120 million) for alleged antimonopoly violations in 2005 through the first quarter of 2007. The
Competition Committee’s order was affirmed by the economic court in April 2008 (“April 2008 Decision”). The
economic court also issued an injunction to secure Nurenergoservice’s alleged liability, freezing
Nurenergoservice’s bank accounts and prohibiting Nurenergoservice from transferring or disposing of its
property. Nurenergoservice’s subsequent appeals to the court of appeals were rejected. In February 2009, the
Antimonopoly Agency (the Competition Committee’s successor) seized approximately KZT 783 million ($5
million) from a frozen Nurenergoservice bank account in partial satisfaction of Nurenergoservice’s alleged
damages liability. However, on appeal to the Kazakhstan Supreme Court, in October 2009, the Supreme Court
annulled the decisions of the lower courts because of procedural irregularities and remanded the case to the
economic court for reconsideration. On remand, in January 2010, the economic court reaffirmed its April 2008
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DECEMBER 31, 2010, 2009, AND 2008
Decision. Nurenergoservice’s appeals in the court of appeals (first panel) and the court of appeals (second panel)
were unsuccessful. Nurenergoservice intends to file a further appeal to the Kazakhstan Supreme Court. In
separate but related proceedings, in August 2007, the Competition Committee ordered Nurenergoservice to pay
approximately KZT 1.8 billion ($12 million) in administrative fines for its alleged antimonopoly violations.
Nurenergoservice’s appeal to the administrative court was rejected in February 2009. Given the adverse court
decisions against Nurenergoservice, the Antimonopoly Agency may attempt to seize Nurenergoservice’s
remaining assets, which are immaterial to the Company’s consolidated financial statements. The Antimonopoly
Agency has not indicated whether it intends to assert claims against Nurenergoservice for alleged antimonopoly
violations post first quarter 2007. Nurenergoservice believes it has meritorious defenses to the claims asserted
against it; however, there can be no assurances that it will prevail in these proceedings.
In April 2009, the Antimonopoly Agency initiated an investigation of the power sales of Ust-Kamenogorsk
HPP (“UK HPP”) and Shulbinsk HPP, hydroelectric plants under AES concession (collectively, the “Hydros”),
in January through February 2009. The investigation of Shulbinsk HPP is ongoing, but the investigation of UK
HPP has been completed. The Antimonopoly Agency determined that UK HPP abused its market position and
charged monopolistically high prices for power in January through February 2009. The Agency sought an order
from the administrative court requiring UK HPP to pay an administrative fine of approximately KZT 120 million
($1 million) and to disgorge profits for the period at issue, estimated by the Antimonopoly Agency to be
approximately KZT 440 million ($3 million). No fines or damages have been paid to date, however, as the
proceedings in the administrative court have been suspended due to the initiation of related criminal proceedings
against officials of UK HPP. The Hydros believe they have meritorious defenses and will assert them vigorously
in these proceedings; however, there can be no assurances that they will be successful in their efforts.
In April 2009, the Antimonopoly Agency initiated an investigation of Ust-Kamenogorsk TETS LLP’s
(“UKT”) power sales in 2008 through February 2009. The Antimonopoly Agency subsequently concluded that
UKT abused its market position and charged monopolistically high prices for power and should pay an
administrative fine of approximately KZT 136 million ($1 million). The Antimonopoly Agency later sought an
order from the administrative court requiring UKT to pay the fine. The administrative court proceedings have
been suspended due to a related criminal investigation of UKT employees. If the investigation is terminated and
the Antimonopoly Agency prevails in the administrative proceedings, UKT may be ordered to pay the
administrative fine and disgorge the profits from the sales at issue, estimated by the Antimonopoly Agency to be
approximately 514 million KZT ($3 million). UKT believes it has meritorious defenses and will assert them
In December 2007, an arbitral tribunal terminated ESSA’s gas supply contracts with members of the Sierra
Chata Consortium in light of the restrictions that had been placed on the export of gas by the Argentine
Republic. ESSA thereafter terminated its gas transportation contract with Transportadora de Gas del Norte S.A.
(“TGN”), and initiated arbitration seeking relief from the obligation to pay the firm tariff under ESSA’s gas
transportation contracts with Gasoducto GasAndes (Argentina) S.A. (“GasAndes Argentina”) and Gasoducto
GasAndes S.A. (“GasAndes Chile”) or in the alternative, termination of such contracts. TGN (which later filed a
lawsuit against ESSA in Argentina), GasAndes Argentina, and GasAndes Chile disputed that the restrictions on
the export of gas justified the adjustment or termination of the respective gas transportation contracts and sought
due tariff payments. On December 29, 2010, ESSA reached settlement agreements with GasAndes Argentina,
GasAndes Chile, and TGN terminating the respective gas transportation contracts and resolving all pending legal
disputes and potential future claims. ESSA recognized approximately $72 million as other expense for the three
months ended December 31, 2010 related to the settlement agreements. Upon termination of the TGN gas
transportation contract, ESSA is no longer required to pay certain charges imposed by the Argentine Republic
relating to gas supply infrastructure.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
In February 2008, the Native Village of Kivalina and the City of Kivalina, Alaska, filed a complaint in the
U.S. District Court for the Northern District of California against the Company and numerous unrelated
companies, claiming that the defendants’ alleged GHG emissions have contributed to alleged global warming
which, in turn, allegedly has led to the erosion of the plaintiffs’ alleged land. The plaintiffs assert nuisance and
concert of action claims against the Company and the other defendants, and a conspiracy claim against a subset
of the other defendants. The plaintiffs seek to recover relocation costs, indicated in the complaint to be from
$95 million to $400 million, and other unspecified damages from the defendants. The Company filed a motion to
dismiss the case, which the District Court granted in October 2009. The plaintiffs have appealed to the U.S.
Court of Appeals for the Ninth Circuit. The parties have briefed the appeal and are awaiting a date for oral
argument. The Company believes it has meritorious defenses to the claims asserted against it and will defend
itself vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts.
In July, 1993 the Public Attorney’s office filed a claim against Eletropaulo, the Sao Paulo State
Government, SABESP (a state-owned company), CETESB (a state-owned company) and DAEE (the municipal
Water and Electric Energy Department) alleging that they were liable for pollution of the Billings Reservoir as a
result of pumping water from the Pinheiros River into the Billings Reservoir. The events in question occurred
while Eletropaulo was a state-owned company. An initial lower court decision in 2007 found the parties liable for
the payment of approximately R$670 million ($401 million) for remediation. Eletropaulo subsequently appealed
the decision to the Appellate Court of the State of Sao Paulo which reversed the lower court decision. In 2009,
the Public Attorney’s Office has filed appeals to both Superior Court of Justice (“SCJ”) and the Supreme Court
(“SC”) and such appeals were answered by Eletropaulo in the fourth quarter of 2009. Eletropaulo believes it has
meritorious defenses to the claims asserted against it and will defend itself vigorously in these proceedings;
however, there can be no assurances that it will be successful in its efforts.
In September 1996, a public civil action was asserted against Eletropaulo and Associação Desportiva
Cultural Eletropaulo (the “Associação”) relating to alleged environmental damage caused by construction of the
Associação near Guarapiranga Reservoir. The initial decision that was upheld by the Appellate Court of the State
of Sao Paulo in 2006 found that Eletropaulo should repair the alleged environmental damage by demolishing
certain construction and reforesting the area, and either sponsor an environmental project which would cost
approximately R$1 million ($599 thousand) as of December 31, 2010, or pay an indemnification amount of
approximately R$10.2 million ($6 million). Eletropaulo has appealed this decision to the Supreme Court and is
awaiting a decision.
In February 2009, a CAA Section 114 information request from the EPA regarding Cayuga and Somerset
was received. The request seeks various operating and testing data and other information regarding certain types
of projects at the Cayuga and Somerset facilities, generally for the time period from January 1, 2000 through the
date of the information request. This type of information request has been used in the past to assist the EPA in
determining whether a plant is in compliance with applicable standards under the CAA. Cayuga and Somerset
responded to the EPA’s information request in June 2009, and they are awaiting a response from the EPA
regarding their submittal. At this time, it is not possible to predict what impact, if any, this request may have on
the Company, its results of operations or its financial position.
On February 2, 2009, the Cayuga facility received a Notice of Violation from the New York State
Department of Environmental Conservation (“NYSDEC”) that the facility had exceeded the permitted volume
limit of coal ash that can be disposed of in the on-site landfill. Cayuga has met with NYSDEC and submitted a
Landfill Liner Demonstration Report to them. Such report found that the landfill has adequate engineering
integrity to support the additional coal ash and there is no inherent environmental threat. NYSDEC has indicated
they accept the finding of the report. A permit modification was approved by the NYSDEC on May 14, 2010 and
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
such permit modification allows for closure of this approximately 10-acre portion of the landfill. The
construction in accordance with the approved permit modification was completed in November 2010 and the
certification report for this construction project is currently being drafted to submit to the NYSDEC in the second
quarter of 2011. While at this time it is not possible to predict what impact, if any, this matter may have on the
Company, its results of operations or its financial position, based upon the discussions to date, the Company does
not believe the impact will be material.
In March 2009, AES Uruguaiana Empreendimentos S.A. (“AESU”) initiated arbitration in the International
Chamber of Commerce (“ICC”) against YPF S.A. (“YPF”) seeking damages and other relief relating to YPF’s
breach of the parties’ gas supply agreement (“GSA”). Thereafter, in April 2009, YPF initiated arbitration in the
ICC against AESU and two unrelated parties, Companhia de Gas do Esado do Rio Grande do Sul and
Transportador de Gas del Mercosur S.A. (“TGM”), claiming that AESU wrongfully terminated the GSA and
caused the termination of a transportation agreement (“TA”) between YPF and TGM (“YPF Arbitration”). YPF
seeks an unspecified amount of damages from AESU, a declaration that YPF’s performance was excused under
the GSA due to certain alleged force majeure events, or, in the alternative, a declaration that the GSA and the TA
should be terminated without a finding of liability against YPF because of the allegedly onerous obligations
imposed on YPF by those agreements. In addition, in the YPF Arbitration, TGM asserts that if it is determined
that AESU is responsible for the termination of the GSA, AESU is liable for TGM’s alleged losses, including
losses under the TA. The procedural schedules for the arbitrations have been established but the hearing dates
have not been scheduled to date. AESU believes it has meritorious defenses to the claims asserted against it and
will defend itself vigorously; however, there can be no assurances that it will be successful in its efforts.
the Plant.
In June 2009, the Inter-American Commission on Human Rights of the Organization of American States
(“IACHR”) requested that the Republic of Panama suspend the construction of AES Changuinola S.A.’s
hydroelectric project (“Project”) until the bodies of the Inter-American human rights system can issue a final
decision on a petition (286/08) claiming that the construction violates the human rights of alleged indigenous
communities. In July 2009, Panama responded by informing the IACHR that it would not suspend construction
of the Project and requesting that the IACHR revoke its request. In June 2010, the Inter-American Court of
Human Rights vacated the IACHR’s request. With respect to the merits of the underlying petition, the IACHR
heard arguments by the communities and Panama in November 2009, but has not issued a decision to date. The
Company cannot predict Panama’s response to any determination on the merits of the petition by the bodies of
the Inter-American human rights system.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
In July 2009, AES Energía Cartagena S.R.L. (“AES Cartagena”) received notices from the Spanish national
energy regulator, Comisión Nacional de Energía (“CNE”), stating that the proceeds of the sale of electricity from
AES Cartagena’s plant should be reduced by roughly the value of the CO2 allowances that were granted to AES
Cartagena for free for the years 2007, 2008, and the first half of 2009. In particular, the notices stated that CNE
intended to invoice AES Cartagena to recover that value, which CNE calculated as approximately €20 million
($27 million) for 2007 - 2008 and an amount to be determined for the first half of 2009. In September 2009, AES
Cartagena received invoices for €523,548 (approximately $694,000) for the allowances granted for free for 2007
and €19,907,248 (approximately $26 million) for 2008. In July 2010, AES Cartagena received an invoice for
approximately €5.4 million ($7 million) for the allowances granted for free for the first half of 2009. AES
Cartagena does not expect to be charged for CO2 allowances issued free of charge for subsequent periods. AES
Cartagena has paid the amounts invoiced and has filed challenges to the CNE’s demands in the Spanish judicial
system. There can be no assurances that the challenges will be successful. AES Cartagena has demanded
indemnification from its fuel supply and electricity toller, GDF-Suez, in relation to the CNE invoices under the
long-term energy agreement (the “Energy Agreement”) with GDF-Suez. However, GDF-Suez has disputed that it
is responsible for the CNE invoices under the Energy Agreement. Therefore, in September 2009, AES Cartagena
initiated arbitration against GDF-Suez, seeking to recover the payments made to CNE. In the arbitration, AES
Cartagena also seeks a determination that GDF-Suez is responsible for procuring and bearing the cost of CO2
allowances that are required to offset the CO2 emissions of AES Cartagena’s power plant, which is also in
dispute between the parties. To date, AES Cartagena has paid approximately €20 million ($27 million) for the
CO2 allowances that have been required to offset 2008 and 2009 CO2 emissions. AES Cartagena expects that
allowances will need to be purchased to offset emissions for subsequent years. The evidentiary hearing in the
arbitration took place from May 31-June 4, 2010, and closing arguments were heard on September 1, 2010. In
February 2011, the arbitral tribunal requested further briefing from the parties on certain issues in the arbitration.
If AES Cartagena does not prevail in the arbitration and is required to bear the cost of carbon compliance, its
results of operations could be materially adversely affected and, in turn, there could be a material adverse effect
on the Company and its results of operations. AES Cartagena believes it has meritorious claims and will assert
them vigorously in these proceedings; however, there can be no assurances that it will be successful in its efforts.
In September 2009, the Public Defender’s Office of the State of Rio Grande do Sul (“PDO”) filed a class
action against AES Sul in the 16th District Court of Porto Alegre, Rio Grande do Sul (“District Court”), claiming
that AES Sul has been illegally passing PIS and COFINS taxes (taxes based on AES Sul’s income) to consumers.
According to ANEEL’s Order No. 93/05, the federal laws of Brazil, and the Brazilian Constitution, energy
companies such as AES Sul are entitled to highlight PIS and COFINS taxes in power bills to final consumers, as
the cost of those taxes is included in the energy tariffs that are applicable to final consumers. Before AES Sul had
been served with the action, the District Court dismissed the lawsuit in October 2009 on the ground that AES Sul
had been properly highlighting PIS and COFINS taxes in consumer bills in accordance with Brazilian law. In
April 2010, the PDO appealed to the Appellate Court of the State of Rio Grande do Sul (“AC”). In November
2010, the AC affirmed the dismissal. The PDO is expected to appeal. If the dismissal is ever reversed and AES
Sul does not prevail in the lawsuit and is ordered to cease recovering PIS and COFINS taxes pursuant to its
energy tariff, its potential prospective losses could be approximately R$9.6 million ($6 million) per month, as
estimated by AES Sul. In addition, if AES Sul is ordered to reimburse consumers, its potential retrospective
liability could be approximately R$1.2 billion ($718 million), as estimated by AES Sul. AES Sul believes it has
meritorious defenses to the claims asserted against it and will defend itself vigorously in these proceedings if it is
served with the action; however, there can be no assurances that it would be successful in its efforts.
Furthermore, if AES Sul does not prevail in the litigation it will seek to adjust its energy tariff to compensate it
for its losses, but there can be no assurances that it would be successful in obtaining an adjusted energy tariff.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
In October 2009, IPL received a Notice of Violation (“NOV”) and Finding of Violation from EPA pursuant
to CAA Section 113(a). The NOV alleges violations of the CAA at IPL’s three coal-fired electric generating
facilities dating back to 1986. The alleged violations primarily pertain to EPA’s Prevention of Significant
Deterioration and nonattainment New Source Review (“NSR”) requirements under the CAA. Since receiving the
letter, IPL management has met with EPA staff and is currently in discussions with the EPA regarding possible
resolutions to this NOV. At this time, we cannot predict the ultimate resolution of this matter. However,
settlements and litigated outcomes of similar cases have required companies to pay civil penalties and to install
additional pollution control technology on coal-fired electric generating units. A similar outcome in this case
could have a material impact to IPL and could, in turn, have a material impact on the Company. IPL would seek
recovery through customer rates of any operating or capital expenditures related to pollution control technology
systems to reduce regulated air emissions; however, there can be no assurances that it would be successful in that
regard.
In November 2009, April 2010 and December 2010, substantially similar personal injury lawsuits were filed
by a total of 26 residents and estates in the Dominican Republic against the Company, AES Atlantis, Inc., AES
Puerto Rico, LP, AES Puerto Rico, Inc., and AES Puerto Rico Services, Inc., in the Superior Court for the State
of Delaware. In each lawsuit the plaintiffs allege that the coal combustion byproducts of AES Puerto Rico’s
power plant were illegally placed in the Dominican Republic in October 2003 through March 2004 and
subsequently caused the plaintiffs’ birth defects, other personal injuries, and/or deaths. The plaintiffs do not
quantify their alleged damages, but generally allege that they are entitled to compensatory and punitive damages.
The AES defendants have moved for partial dismissal of both the November 2009 and April 2010 lawsuits on
various grounds. (The AES Defendants have until mid-February to respond to the December 2010 lawsuit.) In
September 2010, the Superior Court heard arguments on the motions. The Superior Court dismissed the
plaintiffs’ fraud allegations without prejudice to replead, and the plaintiffs filed amended complaints in
November 2010. The AES defendants have filed a renewed motion to dismiss the amended issues. The remaining
claims (other than fraud) addressed in the AES defendants’ original motion to dismiss are still pending. The AES
defendants believe they have meritorious defenses to the claims asserted against them and will defend themselves
vigorously; however, there can be no assurances that they will be successful in their efforts.
On December 21, 2010, AES-3C Maritza East 1 EOOD, which owns an unfinished 670MW lignite-fired
power plant in Bulgaria, made the first in a series of demands on the performance bond securing the construction
Contractor’s obligations under the parties’ EPC Contract. The Contractor failed to complete the plant on
schedule. The total amount demanded by Maritza under the performance bond is approximately €155 million
($205 million). However, the Contractor obtained a temporary injunction from a French court preventing the
issuing bank from honoring the bond demands. As the performance bond is governed by English law, Maritza
obtained a judgment from an English court that the bond should be paid, and then presented this judgment to the
French court which issued the temporary injunction. However, on February 10, 2011, the French court issued a
decision enjoining the issuing bank from honoring the demands on the performance bond pending the
determination of the arbitration between Maritza and the Contractor, described below. Maritza is attempting to
lift that injunction or otherwise obtain payment on its demands. In addition, in December 2010, the Contractor
issued a notice of dispute alleging that the lignite that has been supplied by Maritza for commissioning of the
power plant is out of specification, allegedly entitling the Contractor to an extension of time to complete the
power plant, an increase to the contract price of approximately €62 million ($82 million), and other relief. The
Contractor thereafter advised Maritza that it had stopped commissioning of the power plant’s two units because
of the characteristics of the lignite supplied, and, in January 2011, initiated arbitration on its lignite
claim. Maritza disputes that the lignite is out of specification and intends to defend the arbitration and assert
counterclaims for delay liquidated damages and other relief relating to the Contractor’s failure to complete the
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
power plant and other breaches of the EPC contract. Maritza believes it has meritorious claims and defenses and
its efforts.
13. BENEFIT PLANS

DEFINED CONTRIBUTION PLAN—The Company sponsors one defined contribution plan, qualified
under section 401 of the Internal Revenue Code. All U.S. employees of the Company are eligible to participate in
the plan except for those employees who are not covered by their collective bargaining agreement. The plan
provides matching contributions in AES common stock, other contributions at the discretion of the
Compensation Committee of the Board of Directors in AES common stock and discretionary tax deferred
contributions from the participants. Participants are fully vested in their own contributions and the Company’s
matching contributions. Participants vest in other company contributions ratably over a five-year period ending
on the fifth anniversary of their hire date. Company contributions to the plans were approximately $22 million,
$22 million, and $21 million for the years ended December 31, 2010, 2009, and 2008, respectively.
DEFINED BENEFIT PLANS—Certain of the Company’s subsidiaries have defined benefit pension plans
covering substantially all of their respective employees. Pension benefits are based on years of credited service,
age of the participant and average earnings. Of the 29 defined benefit plans, three are at U.S. subsidiaries and the
remaining plans are at foreign subsidiaries.
AES adopted the measurement date provisions of the pension accounting guidance, which require a
year-end measurement date of plan assets and obligations for all defined benefit plans, for the fiscal year ended
December 31, 2008 and, accordingly, recognized a cumulative adjustment of $1 million to retained earnings as of
December 31, 2008.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table reconciles the Company’s funded status, both domestic and foreign, as of December 31,
2010 and 2009:
December 31,
2010 2009
U.S. Foreign U.S. Foreign
(in millions)
CHANGE IN PROJECTED BENEFIT OBLIGATION:
Benefit obligation at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 579 $ 5,138 $ 557 $ 3,498
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 17 7 13
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 511 34 459
Employee contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5 — 19
Plan amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 — — —
Plan settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (2) — —
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) (411) (30) (366)
Business combinations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 14 — —
Actuarial loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 474 11 304
Effect of foreign currency exchange rate change . . . . . . . . . . . . . . . . . . . . . . — 249 — 1,211
Benefit obligation as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 642 $ 5,995 $ 579 $ 5,138
CHANGE IN PLAN ASSETS:
Fair value of plan assets at beginning of year . . . . . . . . . . . . . . . . . . . . . . . . . $ 392 $ 4,045 $ 327 $ 2,752
Actual return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 742 74 489
Employer contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 157 21 188
Employee contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 5 — 19
Plan settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (2) — —
Benefits paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (31) (411) (30) (366)
Effect of foreign currency exchange rate change . . . . . . . . . . . . . . . . . . . . . . — 198 — 963
Fair value of plan assets as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . $ 438 $ 4,734 $ 392 $ 4,045
RECONCILIATION OF FUNDED STATUS
Funded status as of December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(204) $(1,261) $(187) $(1,093)
The following table summarizes the amounts recognized on the Consolidated Balance Sheets related to the
funded status of the plans, both domestic and foreign, as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
AMOUNTS RECOGNIZED ON THE
CONSOLIDATED BALANCE SHEETS
Noncurrent assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $ 34 $ — $ 32
Accrued benefit liability—current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — (5) — (4)
Accrued benefit liability—long-term . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (204) (1,290) (187) (1,121)
Net amount recognized at end of year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(204) $(1,261) $(187) $(1,093)
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes the Company’s accumulated benefit obligation, both domestic and foreign,
as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Accumulated Benefit Obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $623 $5,936 $562 $5,098
Information for pension plans with an accumulated benefit obligation in
excess of plan assets:
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $642 $5,703 $579 $4,887
Accumulated benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 623 5,657 562 4,855
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 4,410 392 3,765
Information for pension plans with a projected benefit obligation in excess of
plan assets:
Projected benefit obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $642 $5,710 $579 $4,892
Fair value of plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 438 4,415 392 3,766
The table below summarizes the significant weighted average assumptions used in the calculation of benefit
obligation and net periodic benefit cost, both domestic and foreign, as of December 31, 2010 and 2009:
December 31,
2010 2009
Benefit Obligation:
Discount rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.38% 9.84% 5.93% 10.56%
Rates of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.00% 6.00% 4.00% 6.00%
Periodic Benefit Cost:
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5.93% 10.56% 6.26% 11.78%
Expected long-term rate of return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00% 11.12% 8.00% 11.99%
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.00% 6.00% 4.75% 5.97%
A subsidiary of the Company has a defined benefit obligation of $607 million and $549 million as of
December 31, 2010 and 2009, respectively, and uses salary bands to determine future benefit costs rather than
rates of compensation increases. Rates of compensation increases in the table above do not include amounts
related to this specific defined benefit plan.
The Company establishes its estimated long-term return on plan assets considering various factors, which
include the targeted asset allocation percentages, historic returns and expected future returns.
The measurement of pension obligations, costs and liabilities is dependent on a variety of assumptions.
These assumptions include estimates of the present value of projected future pension payments to all plan
participants, taking into consideration the likelihood of potential future events such as salary increases and
demographic experience. These assumptions may have an effect on the amount and timing of future
contributions.
241
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The assumptions used in developing the required estimates include the following key factors:
• discount rates;
• salary growth;
• retirement rates;
• inflation;
• expected return on plan assets; and
• mortality rates.
The effects of actual results differing from the Company’s assumptions are accumulated and amortized over
future periods and, therefore, generally affect the Company’s recognized expense in such future periods.
Sensitivity of the Company’s pension funded status to the indicated increase or decrease in the discount rate
and long-term rate of return on plan assets assumptions is shown below. Note that these sensitivities may be
asymmetric and are specific to the base conditions at year-end 2010. They also may not be additive, so the
impact of changing multiple factors simultaneously cannot be calculated by combining the individual
sensitivities shown. The December 31, 2010 funded status is affected by the December 31, 2010 assumptions.
Pension expense for 2010 is affected by the December 31, 2009 assumptions. The impact on pension expense
from a one percentage point change in these assumptions is shown in the table below (in millions):
Increase of 1% in the discount rate . . . . . . . . . . . . . . . . . . . . . . . . $(34)

Decrease of 1% in the discount rate . . . . . . . . . . . . . . . . . . . . . . . . $ 43
Increase of 1% in the long-term rate of return on plan assets . . . . $(42)
Decrease of 1% in the long-term rate of return on plan assets . . . $ 42
The following table summarizes the components of the net periodic benefit cost, both domestic and foreign,
for the years ended December 31, 2010 through 2008:
December 31,
2010 2009 2008
Components of Net Periodic Benefit Cost: U.S. Foreign U.S. Foreign U.S. Foreign
(in millions)
Service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7 $ 17 $ 7 $ 13 $ 6 $ 11
Interest cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 511 34 459 32 453
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . (30) (427) (26) (374) (34) (412)
Amortization of initial net asset . . . . . . . . . . . . . . . . . . . . . . . . . — (1) — (2) — (3)
Amortization of prior service cost . . . . . . . . . . . . . . . . . . . . . . . . 3 — 4 — 3 —
Amortization of net loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 38 16 7 1 2
Settlement gain recognized . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 1 — — 1 —
Total pension cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 25 $ 139 $ 35 $ 103 $ 9 $ 51
242
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes the amounts reflected in Accumulated Other Comprehensive Loss on the
Consolidated Balance Sheet as of December 31, 2010 that have not yet been recognized as components of net
periodic benefit cost:
December 31, 2010

Amounts expected to be
Accumulated Other reclassified to earnings
Comprehensive Loss in next fiscal year
(in millions)
Prior service cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $ (2) $— $—
Unrecognized net actuarial gain (loss) . . . . . . . . . . . . . . . . . . . . . . . (3) (876) — (23)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (3) $(878) $— $ (23)
The following table summarizes the Company’s target allocation for 2010 and pension plan asset allocation,
both domestic and foreign, as of December 31, 2010 and 2009:
Percentage of Plan Assets as of

December 31,
Target Allocations 2010 2009
Asset Category U.S. Foreign U.S. Foreign U.S. Foreign
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47% 15% - 30% 53.66% 22.71% 57.23% 22.22%

Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39% 59% - 85% 26.71% 73.36% 34.50% 73.34%
Real estate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0% 0% - 4% — % 2.09% — % 2.07%
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14% 0% - 6% 19.63% 1.84% 8.27% 2.37%
Total pension assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100.00% 100.00% 100.00% 100.00%
The U.S. plans seek to achieve the following long-term investment objectives:
• Maintenance of sufficient income and liquidity to pay retirement benefits and other lump sum
payments;
• Long-term rate of return in excess of the annualized inflation rate;
• Long-term rate of return, net of relevant fees, that meet or exceed the assumed actuarial rate; and
• Long-term competitive rate of return on investments, net of expenses, that is equal to or exceeds
various benchmark rates.
243
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The asset allocation is reviewed periodically to determine a suitable asset allocation which seeks to manage
risk through portfolio diversification and takes into account, among other possible factors, the above-stated
objectives, in conjunction with current funding levels, cash flow conditions and economic and industry trends.
The following table summarizes the Company’s U.S. plan assets by category of investment and level within the
fair value hierarchy as of December 31, 2010 and 2009:

U.S. Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(in millions)
Equity securities:
Common stock . . . . . . . . . . . . . . . . . . . . . $160 $ 36 $— $196 $189 $ 31 $— $220
Mutual funds . . . . . . . . . . . . . . . . . . . . . . 39 — — 39 3 — — 3
Debt securities:
Government debt securities . . . . . . . . . . . 38 — — 38 48 — — 48
Corporate debt securities . . . . . . . . . . . . . 66 — — 66 71 — — 71
Mutual funds(1) . . . . . . . . . . . . . . . . . . . . 2 — — 2 2 — — 2
Other debt securities . . . . . . . . . . . . . . . . 11 — — 11 15 — — 15
Other:
Cash and cash equivalents . . . . . . . . . . . . 70 — — 70 17 — — 17
Other investments . . . . . . . . . . . . . . . . . . — 16 — 16 — 16 — 16
Total plan assets . . . . . . . . . . . . . . . $386 $ 52 $— $438 $345 $ 47 $— $392
(1) Mutual funds categorized as debt securities consist of mutual funds for which debt securities are the primary
underlying investment.
The investment strategy of the foreign plans seeks to maximize return on investment while minimizing risk.
The assumed asset allocation has less exposure to equities in order to closely match market conditions and near
term forecasts. The following table summarizes the Company’s foreign plan assets by category of investment and
level within the fair value hierarchy as of December 31, 2010 and 2009:

Foreign Plans Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total
(in millions)
Equity securities:
Common stock . . . . . . . . . . . . . . . . . $ 30 $ — $— $ 30 $ 21 $ — $— $ 21
Mutual funds . . . . . . . . . . . . . . . . . . 524 — — 524 472 — — 472
Private equity(1) . . . . . . . . . . . . . . . . — — 521 521 — — 406 406
Debt securities:
Certificates of deposit . . . . . . . . . . . — 4 — 4 — 7 — 7
Unsecured debentures . . . . . . . . . . . — 19 — 19 — 14 — 14
Government debt securities . . . . . . . — 234 — 234 — 206 — 206
Mutual funds(2) . . . . . . . . . . . . . . . . . 95 3,110 — 3,205 88 2,646 — 2,734
Other debt securities . . . . . . . . . . . . — 11 — 11 — 5 — 5
Real estate:
Real estate(1) . . . . . . . . . . . . . . . . . . . — — 99 99 — — 84 84
Other:
Cash and cash equivalents . . . . . . . . — 4 — 4 20 2 — 22
Participant loans(3) . . . . . . . . . . . . . . — — 83 83 — — 74 74
Total plan assets . . . . . . . . . . . . . . . . $649 $3,382 $703 $4,734 $601 $2,880 $564 $4,045
244
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(1) Plan assets of our Brazilian subsidiaries are invested in private equities and commercial real estate through
the plan administrator in Brazil. The fair value of these assets is determined using the income approach
through annual appraisals based on a discounted cash flow analysis.
(2) Mutual funds categorized as debt securities consist of mutual funds for which debt securities are the primary
underlying investment.
(3) Loans to participants are stated at cost, which approximates fair value.
The following table presents a reconciliation of all plan assets measured at fair value using significant
unobservable inputs (Level 3) for the years ended December 31, 2010 and 2009:
Year Ended
December 31,
2010 2009
(in millions)
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $564 $380
Actual return on plan assets:
Returns relating to assets still held at reporting date . . . . . . . . . . . 104 46
Purchases, sales, issuances and settlements . . . . . . . . . . . . . . . . . . . . . . 3 1
Change due to exchange rate changes . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 137
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $703 $564
The following table summarizes the scheduled cash flows for U.S. and foreign expected employer
contributions and expected future benefit payments, both domestic and foreign:
U.S. Foreign
(in millions)
Expected employer contribution in 2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 36 $ 165
Expected benefit payments for fiscal year ending:
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32 432
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33 447
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35 464
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36 481
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 498
2016 - 2020 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 2,751
14. EQUITY
STOCK PURCHASE AGREEMENT
On March 12, 2010, the Company and Terrific Investment Corporation (“Investor”), a wholly owned
subsidiary of China Investment Corporation, entered into a stockholder agreement (the “Stockholder
Agreement”) in connection with the agreement discussed in the following paragraph. Under the Stockholder
Agreement, as long as Investor holds more than 5% of the outstanding shares of common stock of the Company,
Investor will have the right to designate one nominee, who must be reasonably acceptable to the Board, for
election to the Board of Directors of the Company. Investor has not designated its nominee for election to the
Board of Directors of the Company. In addition, until such time as Investor holds 5% or less of the outstanding
shares of common stock, Investor has agreed to vote its shares in accordance with the recommendation of the
245
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Company on any matters submitted to a vote of the stockholders of the Company relating to the election of
directors and compensation matters. Otherwise, Investor may vote its shares at its discretion. Further, under the
Stockholder Agreement, Investor will be subject to a standstill restriction which generally prohibits Investor from
purchasing additional securities of the Company beyond the level acquired by it under the stock purchase
agreement entered into between Investor and the Company on November 6, 2009. In addition, Investor has
agreed to a lock-up restriction such that Investor would not sell its shares for a period of 12 months following the
closing, subject to certain exceptions. The standstill and lock-up restrictions also terminate at such time as
Investor holds 5% or less of the outstanding shares of common stock. Investor will have certain registration
rights and preemptive rights under the Stockholder Agreement with respect to its shares of common stock of the
Company.
On March 15, 2010, the Company completed the sale of 125,468,788 shares of common stock to Investor.
The shares were sold for $12.60 per share, for an aggregate purchase price of $1.58 billion. Investor’s ownership
in the Company’s common stock is now approximately 15% of the Company’s total outstanding shares of
common stock on a fully diluted basis.
STOCK REPURCHASE PROGRAM

In July 2010, the Company’s Board of Directors approved a stock repurchase program under which the
Company may repurchase up to $500 million of AES common stock. The Board authorization permits the
Company to repurchase stock through a variety of methods, including open market repurchases and/or privately
negotiated transactions. The original authorization was set to expire on December 31, 2010, however; in
December 2010, the Board authorized an extension of the stock repurchase program. There can be no assurance
as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors.
The stock repurchase program may be modified, extended or terminated by the Board of Directors at any time.
During the year ended December 31, 2010, shares of common stock repurchased under this plan totaled
8,382,825 at a total cost of $99 million plus a nominal amount of commissions (average of $11.86 per share
including commissions). There was $401 million remaining under the stock repurchase program available for
future repurchases at December 31, 2010.
On August 7, 2008, the Company’s Board of Directors approved a share repurchase plan for up to
$400 million of AES common stock. The Board authorization permitted the Company to repurchase shares over a
six month period ended February 7, 2009. Shares of common stock repurchased under this plan through
December 31, 2008 totaled 10,691,267 at a total cost of $143 million plus commissions of $0.3 million (average
of $13.41 per share including commissions). The Board authorization of the stock repurchase program expired on
February 7, 2009.
The shares of stock repurchased have been classified as treasury stock and accounted for using the cost
method. A total of 17,287,073 and 9,534,580 shares were held in treasury stock at December 31, 2010 and 2009,
respectively. The Company has not retired any shares held in treasury during the years ended December 31,
2010, 2009 or 2008.
246
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
COMPREHENSIVE INCOME
The components of comprehensive income for the years ended December 31, 2010, 2009 and 2008 were as
follows:
December 31,
2010 2009 2008
(in millions)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,059 $ 1,755 $ 2,032
Change in fair value of available-for-sale securities, net of income tax
(expense) benefit of $3, $(4) and $0, respectively . . . . . . . . . . . . . . . . . . . . . (5) 6 —
Foreign currency translation adjustments, net of income tax (expense) benefit
of $(11), $(78) and $53, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 468 742 (1,052)
Derivative activity:
Reclassification to earnings, net of income tax (expense) of $(30), $(41)
and $(19), respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 (141) 90
Change in derivative fair value, net of income tax (expense) benefit of
$56, $34 and $(29), respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (242) 214 (158)
Total change in fair value of derivatives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (151) 73 (68)
Change in unfunded pension obligation, net of income tax benefit of $45, $69
and $77, respectively . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (88) (139) (149)
Other comprehensive income (loss) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 224 682 (1,269)
Comprehensive income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,283 2,437 763
Less: Comprehensive income attributable to noncontrolling interests(1) . . . . . . . . . . (1,038) (1,485) (169)
Comprehensive income attributable to The AES Corporation . . . . . . . . . . . . . . . . . $ 245 $ 952 $ 594
(1) Reflects the (income) loss attributed to noncontrolling interests in the form of common securities and
dividends on preferred stock.
The following table summarizes the balances comprising accumulated other comprehensive loss, net of tax,
as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Foreign currency translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,824 $2,312
Unrealized derivative losses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 344 224
Unfunded pension obligation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 216 194
Unrealized loss on securities available for sale . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (6)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,383 $2,724
247
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes the net income attributable to The AES Corporation and transfers (to) from
noncontrolling interests for the years ended December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Net income attributable to The AES Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $658
Transfers (to) from the noncontrolling interests:
Decrease in The AES Corporation’s paid-in capital for purchase of subsidiary shares . . . (25) —
Net transfers (to) from noncontrolling interest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (25) —
Change from net income attributable to The AES Corporation and transfers (to) from
noncontrolling interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(16) $658
15. SEGMENT AND GEOGRAPHIC INFORMATION

The management reporting structure is organized along our two lines of business (Generation and Utilities)
and three regions: (1) Latin America & Africa; (2) North America; and (3) Europe, Middle East & Asia
(collectively “EMEA”), each managed by a regional president. The segment reporting structure uses the
Company’s management reporting structure as its foundation to reflect how the Company manages the business
internally. During 2010, the Company modified its internal reporting structure to move the management of the
Company’s generation business in Jordan, Amman East, from Asia to Europe. Accordingly, Amman East is now
reported within the Europe—Generation segment. All prior periods have been retrospectively restated to reflect
this change and conform to current period presentation. The Company applied the segment reporting accounting
guidance, which provides certain quantitative thresholds and aggregation criteria, and the Company concluded it
has six reportable segments which include:
Corporate and Other—The Company’s Europe Utilities, Africa Utilities, Africa Generation, Wind
Generation and Climate Solutions operating segments are reported within “Corporate and Other” because they do
not meet the criteria to allow for aggregation with another operating segment or the quantitative thresholds that
would require separate disclosure under segment reporting accounting guidance. None of these operating
segments are currently material to our presentation of reportable segments, individually or in the aggregate. AES
Solar and certain other unconsolidated businesses are accounted for using the equity method of accounting;
therefore, their operating results are included in “Net Equity in Earnings of Affiliates” on the face of the
Consolidated Statements of Operations, not in revenue or gross margin. “Corporate and Other” also includes
costs related to corporate overhead costs which are not directly associated with the operations of our six
reportable segments and other intercompany charges such as self-insurance premiums which are fully eliminated
in consolidation.
248
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The Company uses Adjusted Gross Margin, a non-GAAP measure, to evaluate the performance of its
segments. Adjusted Gross Margin is defined by the Company as: Gross Margin plus depreciation and
amortization less general and administrative expenses.
Segment revenue includes inter-segment sales related to the transfer of electricity from generation plants to
utilities within Latin America. No material inter-segment revenue relationships exist between other segments.
Corporate allocations include certain management fees and self insurance activities which are reflected within
segment Adjusted Gross Margin. All intra-segment activity has been eliminated with respect to revenue and
Adjusted Gross Margin within the segment. Inter-segment activity has been eliminated within the total
consolidated results. All balance sheet information for businesses that were discontinued or classified as held for
sale as of December 31, 2010 is segregated and is shown in the line “Discontinued Businesses” in the
accompanying segment tables.
The tables below present the breakdown of business segment balance sheet and income statement data as of
and for the years ended December 31, 2010 through 2008:
Total Revenue Intersegment External Revenue

2010 2009 2008 2010 2009 2008 2010 2009 2008
(in millions)
Revenue
Latin America—Generation . . . . . $ 4,281 $ 3,651 $ 4,468 $(1,017) $(864) $(991) $ 3,264 $ 2,787 $ 3,477
Latin America—Utilities . . . . . . . 7,222 6,092 5,907 — — — 7,222 6,092 5,907
North America—Generation . . . . 1,972 1,940 2,234 — — — 1,972 1,940 2,234
North America—Utilities . . . . . . . 1,145 1,068 1,079 — — — 1,145 1,068 1,079
Europe—Generation . . . . . . . . . . . 1,362 820 1,143 (2) 2 — 1,360 822 1,143
Asia—Generation . . . . . . . . . . . . . 618 375 345 — — — 618 375 345
Corp/Other and eliminations . . . . 47 8 21 1,019 862 991 1,066 870 1,012
Total Revenue . . . . . . . . . . . . . . . $16,647 $13,954 $15,197 $ — $— $— $16,647 $13,954 $15,197
249
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Total Adjusted Gross External Adjusted Gross

Margin Intersegment Margin
2010 2009 2008 2010 2009 2008 2010 2009 2008
(in millions)
Adjusted Gross Margin
Latin America—Generation . . . . . . . . . $1,698 $1,528 $1,557 $(1,010) $(852) $(978) $ 688 $ 676 $ 579
Latin America—Utilities . . . . . . . . . . . 1,320 1,130 1,102 1,018 865 991 2,338 1,995 2,093
North America—Generation . . . . . . . . 611 658 836 2 (3) 17 613 655 853
North America—Utilities . . . . . . . . . . . 407 401 419 2 2 2 409 403 421
Europe—Generation . . . . . . . . . . . . . . . 355 244 299 3 4 2 358 248 301
Asia—Generation . . . . . . . . . . . . . . . . . 255 111 (11) 2 4 4 257 115 (7)
Corp/Other and eliminations . . . . . . . . 63 2 (64) (17) (20) (38) 46 (18) (102)
Reconciliation to Income from Continuing Operations before Taxes
Depreciation and amortization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,137) (980) (938)
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,526) (1,485) (1,770)
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 348 519
Other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (239) (111) (161)
Other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108 465 375
Gain on sale of investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 131 909
Loss on sale of subsidiary stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (31)
Goodwill impairment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (21) (122) —
Asset impairment expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,221) (25) (175)
Foreign currency transaction gains (losses) on net monetary position . . . . . . . . . . . . . . (33) 33 (184)
Other non-operating expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (7) (12) (15)
Income from continuing operations before taxes and equity in earnings of affiliates . . . $ 1,044 $ 2,316 $ 2,667
Depreciation and
Total Assets Amortization Capital Expenditures
2010 2009 2008 2010 2009 2008 2010 2009 2008
(in millions)
Latin America—Generation . . . . . . . $10,373 $ 9,802 $ 8,217 $ 215 $ 183 $ 168 $ 641 $ 951 $ 886
Latin America—Utilities . . . . . . . . . 10,081 9,233 7,124 254 220 221 649 413 437
North America—Generation . . . . . . 4,926 6,226 6,444 206 208 197 81 98 134
North America—Utilities . . . . . . . . . 3,139 3,035 3,092 161 157 152 177 116 117
Europe—Generation . . . . . . . . . . . . . 4,191 3,184 2,885 117 56 49 235 212 534
Asia—Generation . . . . . . . . . . . . . . . 1,762 1,594 1,588 33 32 23 10 22 32
Discontinued businesses . . . . . . . . . . — 1,196 1,387 8 44 53 4 4 13
Corp/Other and eliminations . . . . . . 6,039 5,265 4,069 184 149 138 536 722 744
Total . . . . . . . . . . . . . . . . . . . . . . . . . $40,511 $39,535 $34,806 $1,178 $1,049 $1,001 $2,333 $2,538 $2,897
250
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Investment in and Advances

to Affiliates Equity in Earnings (Loss)
2010 2009 2008 2010 2009 2008
(in millions)
Latin America—Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 150 $ 129 $ 81 $ 48 $ 30 $ 9
Latin America—Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
North America—Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 3 2 (2) (2) (2)
North America—Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 1 — — —
Europe—Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 353 308 232 19 50 28
Asia—Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 390 371 3 28 12
Discontinued businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — — —
Corp/Other and eliminations . . . . . . . . . . . . . . . . . . . . . . . . . . . . 408 327 214 115 (14) (14)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,320 $1,157 $901 $183 $ 92 $ 33
The table below presents information, by country, about the Company’s consolidated operations for each of
the years ended December 31, 2010 through 2008 and as of December 31, 2010 and 2009, respectively. Revenue
is recorded in the country in which it is earned and assets are recorded in the country in which they are located.
Property, Plant &

Revenue Equipment, net
2010 2009 2008 2010 2009
(in millions)
United States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2,615 $ 2,545 $ 2,745 $ 6,167 $ 7,016
Non-U.S.:
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,473 5,394 5,501 6,413 5,799
Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,355 1,239 1,349 2,560 2,321
Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 887 684 949 459 448
El Salvador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 648 619 484 261 254
Dominican Republic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 535 429 601 625 634
Philippines(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 501 250 148 784 765
Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 422 370 379 823 742
Spain(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411 — — 667 —
Mexico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 409 329 463 786 802
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 393 347 291 387 390
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 385 241 342 527 433
Ukraine . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 356 286 403 86 80
Hungary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 296 317 466 80 196
Puerto Rico . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 267 251 596 609
Panama . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 194 168 210 921 834
Kazakhstan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 138 123 234 63 48
Jordan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120 104 47 224 231
Sri Lanka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100 109 184 69 74
Bulgaria(3) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44 — — 1,825 1,835
Qatar(4) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
Pakistan(5) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
Oman(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — — — —
Other Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112 133 150 298 285
Total Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14,032 11,409 12,452 18,454 16,780
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $16,647 $13,954 $15,197 $24,621 $23,796
251
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
(1) Masinloc was acquired in April 2008; 2008 revenue represents results for a partial year.
(2) Cartagena was consolidated effective January 1, 2010 upon implementation of the variable interest entity
accounting guidance.
(3) Maritza East and our wind project in Bulgaria were under development and therefore not operational as of
December 31, 2009. Our wind project in Bulgaria started operations in 2010.
related to Ras Laffan, which was reflected as discontinued operations and businesses held for sale in the
related to Lal Pir and Pak Gen, which were reflected as discontinued operations and businesses held for sale
in the accompanying Consolidated Statements of Operations and Consolidated Balance Sheets.
2009 and 2008, respectively, and property, plant and equipment of $311 million as of December 31, 2009,
related to Barka, which was reflected as discontinued operations and businesses held for sale in the
16. SHARE-BASED COMPENSATION

STOCK OPTIONS—AES grants options to purchase shares of common stock under stock option plans.
Under the terms of the plans, the Company may issue options to purchase shares of the Company’s common
stock at a price equal to 100% of the market price at the date the option is granted. Stock options are generally
granted based upon a percentage of an employee’s base salary. Stock options issued under these plans in 2010,
2009 and 2008 have a three-year vesting schedule and vest in one-third increments over the three-year period.
The stock options have a contractual term of ten years. At December 31, 2010, approximately 20 million shares
were remaining for award under the plans. In all circumstances, stock options granted by AES do not entitle the
holder the right, or obligate AES, to settle the stock option in cash or other assets of AES.
The weighted average fair value of each option grant has been estimated, as of the grant date, using the
Black-Scholes option-pricing model with the following weighted average assumptions:
December 31,
2010 2009 2008
Expected volatility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38 % 66 % 37 %
Expected annual dividend yield . . . . . . . . . . . . . . . . . . . . . . . . . . . . — % — % — %
Expected option term (years) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 6 6
Risk-free interest rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.86 % 2.01 % 3.04 %
The Company exclusively relies on implied volatility as the expected volatility to determine the fair value
using the Black-Scholes option-pricing model. The implied volatility may be exclusively relied upon due to the
following factors:
• The Company utilizes a valuation model that is based on a constant volatility assumption to value its
employee share options;
• The implied volatility is derived from options to purchase AES common stock that are actively traded;
252
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
• The market prices of both the traded options and the underlying shares are measured at a similar point
in time and on a date reasonably close to the grant date of the employee share options;
• The traded options have exercise prices that are both near-the-money and close to the exercise price of
the employee share options; and
• The remaining maturities of the traded options on which the estimate is based are at least one year.
Pursuant to share-based compensation accounting guidance, the Company used a simplified method to
determine the expected term based on the average of the original contractual term and the pro rata vesting period.
This simplified method was used for stock options granted during 2010, 2009 and 2008. This is appropriate given
a lack of relevant stock option exercise data. This simplified method may be used as the Company’s stock
options have the following characteristics:
• The stock options are granted at-the-money;
• Exercisability is conditional only on performing service through the vesting date;
• If an employee terminates service prior to vesting, the employee forfeits the stock options;
• If an employee terminates service after vesting, the employee has a limited time to exercise the stock
option; and
• The stock option is nonhedgeable and not transferable.
The Company does not discount the grant date fair values to estimate post-vesting restrictions. Post-vesting
restrictions include black-out periods when the employee is not able to exercise stock options based on their
potential knowledge of information prior to the release of that information to the public.
Using the above assumptions, the weighted average fair value of each stock option granted was $5.08, $4.08
and $7.65, for the years ended December 31, 2010, 2009, and 2008, respectively.
The following table summarizes the components of stock-based compensation related to employee stock
options recognized in the Company’s financial statements:
December 31,
2010 2009 2008
(in millions)
Pre-tax compensation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $ 10 $12
Tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (3) (3)
Stock options expense, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 7 $ 7 $ 9
Total intrinsic value of options exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2 $ 3 $ 9
Total fair value of options vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 13 13
Cash received from the exercise of stock options . . . . . . . . . . . . . . . . . . . . . . . 2 6 17
Windfall tax benefits realized from the exercised stock options . . . . . . . . . . . . — — 1
There was no cash used to settle stock options or compensation cost capitalized as part of the cost of an
asset for the years ended December 31, 2010, 2009 and 2008. As of December 31, 2010, $5 million of total
unrecognized compensation cost related to stock options is expected to be recognized over a weighted average
period of 1.5 years. There were no modifications to stock option awards during the year ended December 31,
2010.
253
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
A summary of the option activity for the year ended December 31, 2010 follows (number of options in
thousands, dollars in millions except per option amounts):
Weighted Weighted Average

Average Remaining Aggregate
Exercise Contractual Term Intrinsic
Options Price (in years) Value
Outstanding at December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . 22,372 $17.59

Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (338) 6.09
Forfeited and expired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,380) 30.89
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 828 12.17
Outstanding at December 31, 2010 . . . . . . . . . . . . . . . . . . . . . . 20,482 $16.04 3.1 $25
Vested and expected to vest at December 31, 2010 . . . . . . . . . . 20,150 $16.10 2.6 $24
Eligible for exercise at December 31, 2010 . . . . . . . . . . . . . . . . 18,079 $16.68 2.4 $20
The aggregate intrinsic value in the table above represents the total pre-tax intrinsic value (the difference
between the Company’s closing stock price on the last trading day of the fourth quarter of 2010 and the exercise
price, multiplied by the number of in-the-money options) that would have been received by the option holders
had all option holders exercised their options on December 31, 2010. The amount of the aggregate intrinsic value
will change based on the fair market value of the Company’s stock.
The Company initially recognizes compensation cost on the estimated number of instruments for which the
requisite service is expected to be rendered. In 2010, AES has estimated a forfeiture rate of 18.6% and 12.09%
for stock options granted in 2010 to non-officer employees and officer employees of AES, respectively. Those
estimates will be revised if subsequent information indicates that the actual number of instruments forfeited is
likely to differ from previous estimates. Based on the estimated forfeiture rates, the Company expects to expense
$3.7 million on a straight-line basis over a three year period (approximately $1.2 million per year) related to
stock options granted during the year ended December 31, 2010.
RESTRICTED STOCK
Restricted Stock Units Without Market Conditions—The Company issues restricted stock units
(“RSUs”) without market conditions under its long-term compensation plan. The RSUs are generally granted
based upon a percentage of the participant’s base salary. The units have a three-year vesting schedule and vest in
one-third increments over the three-year period. The units are then required to be held for an additional two years
before they can be converted into shares, and thus become transferable. In all circumstances, restricted stock
units granted by AES do not entitle the holder the right, or obligate AES, to settle the restricted stock unit in cash
or other assets of AES.
For the years ended December 31, 2010, 2009, and 2008, RSUs issued without a market condition had a
grant date fair value equal to the closing price of the Company’s stock on the grant date. The Company does not
discount the grant date fair values to reflect any post-vesting restrictions. RSUs without a market condition
granted to non-executive employees during the years ended December 31, 2010, 2009, and 2008 had grant date
fair values per RSU of $12.18, $6.71 and $18.87, respectively. The total grant date fair value of RSUs granted in
2010 without a market condition was $13 million.
254
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The following table summarizes the components of the Company’s stock-based compensation related to its
employee RSUs issued without market conditions recognized in the Company’s consolidated financial
statements:
December 31,
2010 2009 2008
(in millions)
RSU expense before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11 $11 $ 10
Tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (3) (2)
RSU expense, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $ 8 $ 8
Total value of RSUs converted(1)
............................ $ 5 $ 7 $—
Total fair value of RSUs vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $12 $12 $ 10
(1) Amount represents fair market value on the date of conversion.
There was no cash used to settle RSUs or compensation cost capitalized as part of the cost of an asset for the
years ended December 31, 2010, 2009 and 2008. As of December 31, 2010, $11 million of total unrecognized
compensation cost related to RSUs without a market condition is expected to be recognized over a weighted
average period of approximately 1.8 years. There were no modifications to RSU awards during the year ended
December 31, 2010.
A summary of the activity of RSUs without a market condition for the year ended December 31, 2010
follows (number of RSUs in thousands):
Weighted Average Weighted Average

Grant Date Fair Remaining
RSUs Values Vesting Term
Nonvested at December 31, 2009 . . . . . . . . . . . . . . . . . 2,471 $10.73

Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (929) 12.56
Forfeited and expired . . . . . . . . . . . . . . . . . . . . . . . . . . (455) 12.20
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,080 12.18
Nonvested at December 31, 2010 . . . . . . . . . . . . . . . . . 2,167 $10.20 1.5
Vested at December 31, 2010 . . . . . . . . . . . . . . . . . . . . 2,226 $16.48
Vested and expected to vest at December 31, 2010 . . . 3,999 $13.67
The table below summarizes the RSUs without a market condition that vested and were converted during
the years ended December 31, 2010, 2009 and 2008 (number of RSUs in thousands):
December 31,
2010 2009 2008
RSUs vested during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 929 619 597

RSUs converted during the year(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 386 772 59
(1) Net of shares withheld for taxes of 127,000 and 238,000 in the years ended December 31, 2010 and 2009,
respectively. No shares were withheld for taxes during the year ended December 31, 2008.
255
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Restricted Stock Units With Market Conditions—Restricted stock units issued to officers of the
Company have a three-year vesting schedule and include a market condition to vest. Vesting will occur if the
applicable continued employment conditions are satisfied and the Total Stockholder Return (“TSR”) on
AES common stock exceeds the TSR of the Standard and Poor’s 500 (“S&P 500”) over the three-year
measurement period beginning on January 1st in the year of grant and ending after three years on December 31st.
In certain situations where the TSR of both AES common stock and the S&P 500 exhibit a gain over the
measurement period, the grant may vest without the TSR of AES common stock exceeding the TSR of the
S&P 500, if the Compensation Committee exercises its discretion to permit such vesting. The units are then
required to be held for an additional two years subsequent to vesting before they can be converted into shares,
and thus become transferable. In all circumstances, restricted stock units granted by AES do not entitle the holder
the right, or obligate AES, to settle the restricted stock unit in cash or other assets of AES.
The effect of the market condition on restricted stock units issued to officers of the Company is reflected in
the award’s fair value on the grant date for the year ended December 31, 2010. A discount of 5.0% was applied
to the closing price of the Company’s stock on the date of grant to estimate the fair value to reflect the market
condition for RSUs with market conditions granted during the year ended December 31, 2010. RSUs that
included a market condition granted during the year ended December 31, 2010, 2009 and 2008 had a grant date
fair value per RSU of $11.57, $6.68 and $16.23, respectively. The total grant date fair value of RSUs with a
market condition granted in 2010 was $4 million. If no discount was applied to reflect the market condition for
RSUs issued to officers, the total grant date fair value of RSUs with a market condition granted during the year
ended December 31, 2010 would have increased by an immaterial amount.
The following table summarizes the components of the Company’s stock-based compensation related to its
RSUs granted with market conditions recognized in the Company’s consolidated financial statements:
December 31,
2010 2009 2008
(in millions)
RSU expense before income tax . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4 $ 4 $ 4
Tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1) (1) (1)
RSU expense, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 3 $ 3 $ 3
Total value of RSUs converted(1)
........................... $ 3 $ 4 $—
Total fair value of RSUs vested(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . $— $— $ 5
(1) Amount represents fair market value on the date of conversion.
(2) RSUs granted in 2007 with a market condition did not vest in 2010 because the TSR on AES common stock
did not exceed the TSR of the S&P 500 over the three year vesting period.
There was no cash used to settle RSUs or compensation cost capitalized as part of the cost of an asset for the
years ended December 31, 2010, 2009 and 2008. As of December 31, 2010, $5 million of total unrecognized
compensation cost related to RSUs with a market condition is expected to be recognized over a weighted average
period of approximately 1.7 years. There were no modifications to RSU awards during the year ended
December 31, 2010.
256
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
A summary of the activity of RSUs with a market condition for the year ended December 31, 2010 follows
(number of RSUs in thousands):
Weighted Average Weighted Average

Grant Date Fair Remaining
RSUs Values Vesting Term
Nonvested at December 31, 2009 . . . . . . . . . . . . . . . . . 1,136 $10.80

Vested . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — —
Forfeited and expired . . . . . . . . . . . . . . . . . . . . . . . . . . (223) 17.78
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 11.57
Nonvested at December 31, 2010 . . . . . . . . . . . . . . . . . 1,283 $ 9.80 1.3
Vested at December 31, 2010 . . . . . . . . . . . . . . . . . . . . — $ —
Vested and expected to vest at December 31, 2010 . . . 1,125 $ 9.76
The table below summarizes the RSUs with a market condition that vested and were converted during the
years ended 2010, 2009 and 2008 (number of RSUs in thousands):
December 31,
2010 2009 2008
RSUs vested during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 352

RSUs converted during the year(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 410 —
(1) Net of shares withheld for taxes of 102,000 and 153,000 during the years ended December 31, 2010 and
2009, respectively. There were no shares withheld for taxes during the year ended December 31, 2008.
17. SUBSIDIARY STOCK

The Company’s subsidiary had $60 million of cumulative preferred stock outstanding at December 31, 2010
and 2009. This represented five series of preferred stock of IPL, the Company’s integrated utility in Indiana. The
total annual dividend requirements were approximately $3 million at December 31, 2010 and 2009. Certain series
of the preferred stock were redeemable solely at the option of the issuer at prices between $100 and $118 per
share. Holders of the preferred stock are entitled to elect a majority of IPL’s board of directors if IPL has not paid
dividends to its preferred stockholders for four consecutive quarters. Based on the preferred stockholders’ ability
to elect a majority of IPL’s board of directors in this circumstance, the redemption of the preferred shares is
considered to be not solely within the control of the issuer and the preferred stock is considered temporary equity
and presented in the mezzanine level of the Consolidated Balance Sheets in accordance with the relevant
accounting guidance for noncontrolling interests and redeemable securities.
In February 2009, in connection with a preemptive rights period associated with a share issuance (capital
increase) at AES Gener, Inversiones Cachagua Limitada (“Cachagua”), a wholly owned subsidiary of the
Company, paid $175 million to AES Gener to maintain its current ownership percentage of approximately
70.6%.
On November 6, 2008, Cachagua sold a 9.6% ownership interest in AES Gener in a private transaction for
$174.9 million. The sale reduced the Company’s ownership percentage of AES Gener from 80.2% to 70.6%. The
Company recognized a pre-tax loss of $30.8 million, net of $3.6 million of related fees, from this transaction in
the fourth quarter of 2008.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
18. OTHER INCOME AND EXPENSE

The components of other income are summarized as follows:

2010 2009 2008
(in millions)
Gain on extinguishment of tax and other liabilities . . . . . . . . . . . . . . . . . . $ 65 $168 $199
Tax credit settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 129 —
Performance incentive fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 80 —
Insurance proceeds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 40
Gain on sale of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 14 34
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 74 102
Total other income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $108 $465 $375
Other income generally includes gains on asset sales and extinguishments of liabilities, favorable judgments
on contingencies, and other income from miscellaneous transactions.
Other income of $108 million for the year ended December 31, 2010 included the extinguishment of a swap
liability owed by two of our Brazilian subsidiaries, resulting in the recognition of a $62 million gain. The net
impact to the Company after taxes and noncontrolling interest was $9 million. Other income also included a gain
on sale of assets at Eletropaulo.
Other income of $465 million for the year ended December 31, 2009 included $165 million from the
reduction in interest and penalties associated with federal tax debts at Eletropaulo and Sul as a result of the
Programa de Recuperacao Fiscal (“REFIS”) program and a $129 million gain related to a favorable court
decision enabling Eletropaulo to receive reimbursement of excess non-income taxes paid from 1989 to 1992 in
the form of tax credits to be applied against future tax liabilities. The net impact to the Company after income
taxes and noncontrolling interests for these items was $44 million. In addition, the Company recognized income
of $80 million from a performance incentive bonus for management services provided to Ekibastuz and
Maikuben in 2008. The management agreement was related to the sale of these businesses in Kazakhstan in May
2008; see further discussion of this transaction in Note 22—Acquisitions and Dispositions.
Other income of $375 million for the year ended December 31, 2008 included gains on the extinguishment
of a gross receipts tax liability and a legal contingency at Eletropaulo of $117 million and $75 million,
respectively, $32 million of cash proceeds related to a favorable legal settlement at Southland in California,
$29 million of insurance recoveries for damaged turbines at Uruguaiana, $23 million of gains associated with a
sale of land at Eletropaulo and sales of turbines at Itabo, and compensation of $18 million for the impairment
associated with the settlement agreement to shut down Hefei.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The components of other expense are summarized as follows:

2010 2009 2008
(in millions)
Loss on sale and disposal of assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 84 $ 42 $ 34
Gener gas settlement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 — —
Loss on extinguishment of debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37 — 70
AES Wind transaction costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 — —
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 69 57
Total other expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $239 $111 $161
Other expense generally includes losses on asset sales, losses on extinguishment of debt, legal contingencies
and losses from other miscellaneous transactions.
Other expense of $239 million for the year ended December 31, 2010 included $72 million for a settlement
agreement of gas transportation contracts at Gener. There were also previously capitalized transaction costs of
$22 million that were incurred in connection with the preparation for the sale of a noncontrolling interest in our
Wind Generation business. These costs were written off upon the expiration of the letter of intent on June 30,
2010. In addition, there were losses on disposal of assets at Eletropaulo, Panama, and Gener, an $18 million loss
on debt extinguishment at Andres and Itabo, and a $15 million loss at the Parent Company from the retirement of
senior notes.
Other expense of $111 million for the year ended December 31, 2009 included a $13 million loss
recognized when three of our businesses in the Dominican Republic received $110 million par value bonds
issued by the Dominican Republic government to settle existing accounts receivable for the same amount from
the government-owned distribution companies. The loss represented an adjustment to reflect the fair value of the
bonds on the date received. Other expenses also included losses on the disposal of assets at Eletropaulo and
Andres and contingencies at Alicura in Argentina and our businesses in Kazakhstan.
Other expense of $161 million for the year ended December 31, 2008 included $69 million of losses on the
retirement of debt at the Parent Company in June 2008 and at IPALCO associated with a $375 million
refinancing in April 2008, and losses on the disposal of assets primarily at Eletropaulo in Brazil.
19. IMPAIRMENT EXPENSE

Asset Impairment
Asset impairment expense for the year ended December 31, 2010 consisted of:
2010
(in millions)
Eastern Energy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 827
Southland (Huntington Beach) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200
Tisza II . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85
Deepwater . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 79
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $1,221
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Eastern Energy—AES Eastern Energy (“AEE”) operates four coal-fired power plants: Cayuga, Greenidge,
Somerset and Westover, representing generation capacity of 1,169 MW in the western New York power market.
During 2010, the power prices in the New York power market trended downward, similar to North America
natural gas prices. The New York Independent System Operator (“NYISO”) continues to move forward with the
potential addition of a new capacity zone, which is expected to put further downward pressure on the capacity
prices paid to the AEE facilities. In November 2010, legislation was proposed in the state of New Jersey for the
addition of state subsidized capacity additions serving to lower PJM (“Pennsylvania, New Jersey and Maryland”)
Interconnection, L.L.C. capacity price expectations. Similar changes to capacity pricing may be made in the
future in New York. Continued pressure on energy prices, driven by falling natural gas prices and state actions,
indicate that capacity prices are unlikely to reach levels significantly in excess of those achieved historically.
Accordingly, management’s view of long-term capacity markets in western New York was revised downward. In
December 2010, management revised its cash flow forecasts based on these developments and forecasted
continuing negative operating cash flow and losses through 2034. The forecasted energy prices are such that a
hedge strategy significantly beyond those in place at December 31, 2010 would not be economical. Additionally,
on November 15, 2010, Standard & Poor’s downgraded the bond rating of AEE from BB to B+. Collectively, in
the fourth quarter of 2010, these events were considered an impairment indicator for the AES New York asset
group, of which AEE is the most significant component and necessitated a recoverability test of the asset group.
offset by environmental and other remediation costs. The carrying value of the AEE plants of $827 million
exceeded the fair value of $0 million resulting in the recognition of asset impairment expense of $827 million for
the year ended December 31, 2010. AEE is reported in the North America Generation segment.
Southland—In May 2010, the California State Water Board approved a policy to reduce the number of
marine animals killed by seawater cooling systems in coastal power plants in California. At that time since the
policy required the approval of California’s Office of Administrative Law, it was unclear whether the policy
would be approved and the exact form the regulations would take. In October 2010, the Office of Administrative
Law in California approved the policy that will require the Company to change the process through which it uses
ocean water to cool the generation turbines at its Alamitos, Huntington Beach and Redondo Beach (collectively
“Southland”) gas-fired generation facilities in California. The policy requires compliance with the new
regulations by December 31, 2020. The change in the water cooling process will result in significant future
capital expenditures to ensure compliance with the new regulations and the Company determined that an
indicator of impairment existed at September 30, 2010. The Company performed an asset impairment test in
accordance with the accounting guidance on property, plant and equipment. The asset group was determined to
be at the individual plant level and based on the undiscounted cash flow analysis, the Company determined that
260
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
the Huntington Beach asset group was not recoverable. The fair value of the Huntington Beach asset group was
then determined using a discounted cash flow analysis. To assist management in determining the fair value of the
asset group, an independent valuation firm was engaged. Cash flow forecasts and the underlying assumptions for
the valuation were developed by management. The carrying value of the Huntington Beach plant of $288 million
exceeded the fair value of $88 million resulting in the recognition of asset impairment expense of $200 million
for the year ended December 31, 2010. The undiscounted cash flows of the Alamitos and Redondo Beach
generation facilities exceeded their respective carrying values and resulted in no impairment. Huntington Beach
is reported in the North America Generation reportable segment.
Tisza II—During the third quarter of 2010, the Company entered into annual negotiations with the offtaker
of its Tisza II generation plant in Hungary. As a result of these preliminary negotiations, as well as the further
deterioration of the economic environment in Hungary, the Company determined that an indicator of impairment
existed at September 30, 2010. Thus, the Company performed an asset impairment test in accordance with the
accounting guidance on property, plant and equipment and determined that based on the undiscounted cash flow
analysis, the carrying amount of the Tisza II asset group was not recoverable. The fair value of the asset group
was then determined using a discounted cash flow analysis. The carrying value of the Tisza II asset group of
$160 million exceeded the fair value of $75 million resulting in the recognition of asset impairment expense of
$85 million during the year ended December 31, 2010. Tisza II is reported in the Europe Generation reportable
segment.
Deepwater—In March 2010, Deepwater, our 160 MW pet coke-fired merchant power plant located in
goodwill and recoverability test for the long-lived asset group. Based on the results of these tests in the second
performed another impairment evaluation of Deepwater’s goodwill and recoverability test of the long-lived asset
group. The results in the third quarter indicated no impairment was necessary for the asset group, but the
written off during the quarter ended September 30, 2010.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
fourth quarter of 2010. Deepwater is reported in the North America Generation reportable segment.
2009
(in millions)
Piabanha . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $25
During the fourth quarter of 2009, the Company recognized a pre-tax long-lived asset impairment charge of
$11 million related to the Company’s Piabanha hydro project in Brazil. The Company determined that the
carrying value exceeded the future discounted cash flows and abandoned the project. Piabanha is reported in the
Company’s Latin America Generation segment.
2008
(in millions)
LNG projects in North America . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 67
Uruguaiana . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
South African peakers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
Hefei . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Other . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $175
In the fourth quarter of 2008 and in response to the financial market crisis, the Company reviewed and
prioritized projects in the development pipeline. From this review, the Company determined that the carrying
value exceeded the future discounted cash flows for certain projects. In accordance with the accounting standards
for the impairment or disposal of long-lived assets, the Company recorded a total pre-tax impairment charge of
$75 million ($34 million, net of noncontrolling interests and income taxes) related to two liquefied natural gas
projects in North America and a non-power development project at one of our facilities in North America. These
projects were reported in the North America Generation segment.
Following an initial impairment charge in the fourth quarter of 2007 at Uruguaiana, there were impairment
charges of $36 million recognized during the first three quarters of 2008. The impairment was triggered by a
combination of gas curtailments and increases in the spot market price of energy in 2007 that continued in 2008.
The additional impairment charges in 2008 were primarily due to fixed asset purchase agreements in place.
Uruguaiana is a thermoelectric generation plant located in Brazil and reported in the Latin America Generation
segment.
The Company recognized impairment charges totaling $31 million related to a project in South Africa the
Company withdrew from during the first quarter of 2008. These represented project development costs and an
impairment of turbine deposits related to the project. All costs capitalized and incurred on the project have been
written off as no future benefit is expected from these assets. This project was reported in “Corporate and Other.”
262
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
The Anhui Development and Reform commission issued notice to our Hefei plant in China, in March 2007
as a result of the 2007 State Council’s decision to shut down smaller, inefficient and potentially polluting
generation units nationwide. A settlement agreement was signed March 30, 2008 to end the contractual PPA
arrangement. In accordance with the accounting standards for goodwill and other intangible assets, management
concluded that the assets were impaired in March 2008, since the long-lived asset group would be sold or
otherwise disposed of significantly before the end of its previously estimated life. As a result, impairment
charges of $18 million were recognized associated with the settlement agreement to shut down the Hefei plant,
which is reported in the Asia Generation segment.
Other Impairments
In addition to the asset impairment expense discussed above, other-than-temporary impairments of cost
method investments of $1 million, $12 million and $15 million were recorded in the years ended December 31,
2010, 2009 and 2008, respectively. The impairment charges in 2009 and 2008 primarily related to the Company’s
investment in a company developing a commercial facility for a “blue gas” (coal to gas) technology project. The
Company accounted for the investment in convertible preferred shares under the cost method of accounting.
During the fourth quarter of 2008, the market value of the shares materially declined due to downward trends in
the capital markets and management concluded that the decline was other-than-temporary and recorded an
impairment charge of $10 million. In 2009, this investment was determined to be further impaired and an
additional $10 million other-than-temporary impairment charge, representing the remaining value of the shares,
was recognized.
20. INCOME TAXES

INCOME TAX PROVISION
The following table summarizes the expense for income taxes on continuing operations, for the years ended
December 31, 2010, 2009 and 2008:
December 31,
2010 2009 2008
(in millions)
Federal:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (8) $ 3 $ 12
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (407) (146) 122
State:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 — (1)
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (19) (9) (7)
Foreign:
Current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 699 552 611
Deferred . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 199 34
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 307 $ 599 $771
263
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
EFFECTIVE AND STATUTORY RATE RECONCILIATION

The following table summarizes a reconciliation of the U.S. statutory federal income tax rate to the
Company’s effective tax rate, as a percentage of income from continuing operations before taxes for the years
ended December 31, 2010, 2009 and 2008:
December 31,
2010 2009 2008
Statutory Federal tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35% 35% 35%

State taxes, net of Federal tax benefit . . . . . . . . . . . . . . . . . . . . . . . . . (9) (1) —
Taxes on foreign earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (9) (5) (3)
Valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 — 2
Gain on sale of businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 (3) (12)
Chilean withholding tax reversals . . . . . . . . . . . . . . . . . . . . . . . . . . . . (5) — —
Taxes on cash repatriation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 5
Other—net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 2
Effective tax rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29% 26% 29%
The current income taxes receivable and payable are included in Other Current Assets and Accrued and
Other Liabilities, respectively, on the accompanying Consolidated Balance Sheets. The noncurrent income taxes
receivable and payable are included in Other Assets and Other Long-Term Liabilities, respectively, on the
accompanying Consolidated Balance Sheets. The following table summarizes the income taxes receivable and
payable as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Income taxes receivable—current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $520 $434
Income taxes receivable—noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 22
Total income taxes receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $541 $456
Income taxes payable—current . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $701 $508
Income taxes payable—noncurrent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 11
Total income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $709 $519
DEFERRED INCOME TAXES—Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for financial reporting purposes and the
amounts used for income tax purposes and (b) operating loss and tax credit carryforwards. These items are stated
at the enacted tax rates that are expected to be in effect when taxes are actually paid or recovered.
As of December 31, 2010, the Company had federal net operating loss carryforwards for tax purposes of
approximately $1.7 billion expiring in years 2023 to 2029. Approximately $68 million of the net operating loss
carryforward related to stock option deductions will be recognized in additional paid-in capital when realized.
The Company also had federal general business tax credit carryforwards of approximately $18 million expiring
primarily from 2020 to 2030, and federal alternative minimum tax credits of approximately $5 million that
carryforward without expiration. The Company had state net operating loss carryforwards as of December 31,
2010 of approximately $3.5 billion expiring in years 2016 to 2031. As of December 31, 2010, the Company had
264
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
foreign net operating loss carryforwards of approximately $4.6 billion that expire at various times beginning in
2011 and some of which carryforward without expiration, and tax credits available in foreign jurisdictions of
approximately $37 million, $3 million of which expire in 2011 to 2013, $15 million of which expire in 2014 to
2021 and $19 million of which carryforward without expiration.
Valuation allowances decreased $338 million during 2010 to $1.3 billion at December 31, 2010. This net
decrease was primarily the result of the removal of valuation allowances against deferred tax assets at foreign
subsidiaries.
Valuation allowances increased $268 million during 2009 to $1.7 billion at December 31, 2009. This net
increase was primarily the result of an increase in foreign net operating loss carryforwards that required full
offsetting valuation allowances.
The Company believes that it is more likely than not that the net deferred tax assets as shown below will be
realized when future taxable income is generated through the reversal of existing taxable temporary differences
and income that is expected to be generated by businesses that have long-term contracts or a history of generating
taxable income. The Company continues to monitor the utilization of its deferred tax asset for its
U.S. consolidated net operating loss carryforward. Although management believes it is more likely than not that
this deferred tax asset will be realized through generation of sufficient taxable income prior to expiration of the
loss carryforwards, such realization is not assured.
The following table summarizes the deferred tax assets and liabilities, as of December 31, 2010 and 2009:
December 31,
2010 2009
(in millions)
Differences between book and tax basis of property . . . . . . . . . . . . . . . . . . . . . . . $ 1,245 $ 1,693
Cumulative translation adjustment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94 (200)
Other taxable temporary differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 392 310
Total deferred tax liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,731 1,803
Operating loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,657) (1,701)
Capital loss carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (93) (107)
Bad debt and other book provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (544) (562)
Retirement costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (315) (283)
Tax credit carryforwards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (60) (68)
Other deductible temporary differences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (414) (427)
Total gross deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3,083) (3,148)
Less: valuation allowance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,339 1,677
Total net deferred tax asset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,744) (1,471)
Net deferred tax (asset)/liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (13) $ 332
The Company considers undistributed earnings of certain foreign subsidiaries to be indefinitely reinvested
outside of the United States and, accordingly, no U.S. deferred taxes have been recorded with respect to such
earnings in accordance with the relevant accounting guidance for income taxes. Should the earnings be remitted
as dividends, the Company may be subject to additional U.S. taxes, net of allowable foreign tax credits. It is not
practicable to estimate the amount of any additional taxes which may be payable on the undistributed earnings.
265
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Income from operations in certain countries is subject to reduced tax rates as a result of satisfying specific
commitments regarding employment and capital investment. The Company’s income tax benefits related to the
tax status of these operations are estimated to be $60 million, $35 million and $23 million for the years ended
December 31, 2010, 2009 and 2008, respectively. The per share effect of these benefits after noncontrolling
interests was $0.07, $0.04 and $0.03 for the year ended December 31, 2010, 2009 and 2008, respectively.
The following table summarizes the income (loss) from continuing operations, before income taxes, net
equity in earnings of affiliates and noncontrolling interests, for the years ended December 31, 2010, 2009 and
2008:
December 31,
2010 2009 2008
(in millions)
U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,342) $ (976) $ (314)
Non-U.S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,386 3,292 2,981
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,044 $2,316 $2,667
UNCERTAIN TAX POSITIONS

Uncertain tax positions have been classified as noncurrent income tax liabilities unless expected to be paid
in one year. The Company’s policy for interest and penalties related to income tax exposures is to recognize
interest and penalties as a component of the provision for income taxes in the Consolidated Statements of
Operations.
As of December 31, 2010 and 2009, the total amount of gross accrued income tax related interest included
in the Consolidated Balance Sheets was $12 million and $21 million, respectively. The total amount of gross
accrued income tax related penalties included in the Consolidated Balance Sheets as of December 31, 2010 and
2009 was $4 million and $5 million, respectively.
The total expense (benefit) for interest related to unrecognized tax benefits for the years ended
December 31, 2010, 2009 and 2008 amounted to $(10) million, $4 million and $2 million, respectively. For the
years ended December 31, 2010, 2009 and 2008, the total expense (benefit) for penalties related to unrecognized
tax benefits amounted to $(1) million, $0 million and $(2) million, respectively.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
We are potentially subject to income tax audits in numerous jurisdictions in the U.S. and internationally
until the applicable statute of limitations expires. Tax audits by their nature are often complex and can require
several years to complete. The following is a summary of tax years potentially subject to examination in the
significant tax and business jurisdictions in which we operate:
Tax Years
Subject to
Jurisdiction Examination
Argentina . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2004-2010
Brazil . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2005-2010
Cameroon . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007-2010
Chile . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1998-2010
Colombia . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2008-2010
El Salvador . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2007-2010
United Kingdom . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1999-2010
United States (Federal) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1994-2010
As of December 31, 2010, 2009 and 2008, the total amount of unrecognized tax benefits was $437 million,
$511 million and $555 million, respectively. The total amount of unrecognized tax benefits that would benefit the
effective tax rate as of December 31, 2010, 2009 and 2008 is $412 million, $484 million and $527 million,
respectively, of which $51 million, $55 million and $131 million, respectively, would be in the form of tax
attributes that would warrant a full valuation allowance.
The total amount of unrecognized tax benefits anticipated to result in a net decrease to unrecognized tax
benefits within 12 months of December 31, 2010 is estimated to be between $4 million and $8 million.
The following is a reconciliation of the beginning and ending amounts of unrecognized tax benefits for the
years ended December 31, 2010, 2009 and 2008:
2010 2009 2008
(in millions)
Balance at January 1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $511 $ 555 $590
Additions for current year tax positions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14 72 6
Additions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 7 80
Reductions for tax positions of prior years . . . . . . . . . . . . . . . . . . . . . . . . . . . (46) (9) (26)
Effects of foreign currency translation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) 6 (74)
Settlements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (67) (104) (18)
Lapse of statute of limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (23) (16) (3)
Balance at December 31 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $437 $ 511 $555
The amount of settlements of uncertain tax positions in 2009 was primarily the result of a non-cash audit
settlement for $105 million at a Brazilian subsidiary which resulted in no tax expense or benefit.
The Company and certain of its subsidiaries are currently under examination by the relevant taxing
authorities for various tax years. The Company regularly assesses the potential outcome of these examinations in
each of the taxing jurisdictions when determining the adequacy of the amount of unrecognized tax benefit
recorded. While it is often difficult to predict the final outcome or the timing of resolution of any particular
uncertain tax position, we believe we have appropriately accrued for our uncertain tax benefits. However, audit
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
outcomes and the timing of audit settlements and future events that would impact our previously recorded
unrecognized tax benefits and the range of anticipated increases or decreases in unrecognized tax benefits are
subject to significant uncertainty. It is possible that the ultimate outcome of current or future examinations may
exceed our provision for current unrecognized tax benefits in amounts that could be material, but cannot be
estimated as of December 31, 2010. Our effective tax rate and net income in any given future period could
therefore be materially impacted.
21. DISCONTINUED OPERATIONS AND HELD FOR SALE BUSINESSES

The following table summarizes the income (loss) on disposal and impairment for the following
discontinued operations for the years ended December 31, 2010, 2009 and 2008:
December 31,
Subsidiary 2010 2009 2008
(in millions)
Barka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 80 $— $—
Lal Pir . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (6) (74) —
Pak Gen . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (16) (76) —
Ras Laffan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 — —
Jiaozuo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — 7
Central Valley . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — — (1)
Gain (loss) on disposal and impairment, after taxes . . . . . . . . . . . . $ 64 $(150) $ 6
On October 20, 2010, the Company completed the sale of its 55% equity interest in Ras Laffan and the
associated operations company in Qatar for aggregate proceeds of approximately $234 million. The Ras Laffan
facility, which was previously reported in the Asia Generation segment, is comprised of a 756 MW combined
cycle gas plant and a water desalination facility. The Company recognized a gain on disposal of $6 million, net of
tax, during the year ended December 31, 2010.
On August 19, 2010, the Company completed the sale of its 35% ownership interest in Barka, a 456 MW
combined cycle gas facility and water desalination plant and its wholly owned interest in two Barka related
service companies. Barka is located in Oman and was previously reported in the Asia Generation segment. Total
consideration received in the transaction was approximately $170 million, of which $124 million was AES’
portion. The Company recognized a gain on disposal of $63 million during the year ended December 31, 2010,
net of noncontrolling interest and $38 million of tax expense associated with the sale.
On June 11, 2010, the Company completed the sale of its 55% ownership in Lal Pir and Pak Gen, two
oil-fired facilities in Pakistan with respective generation capacities of 362 MW and 365 MW. These businesses
were previously reported in the Asia Generation segment. Total consideration received in the transaction was
approximately $117 million, of which $65 million was AES’ portion. The Company recognized a loss on
disposal of $150 million during the year ended December 31, 2009 and impairment losses totaling $22 million
($14 million, net of tax and noncontrolling interests) during the year ended December 31, 2010 to reflect the
change in the carrying value of net assets of Lal Pir and Pak Gen subsequent to meeting the held for sale criteria
as of December 31, 2009.
In December 2008, the Company completed the sale of its 70% ownership interest in Jiaozuo AES Wanfang
Power Co., Ltd. (“Jiaozuo”), which was reported in the Asia Generation segment, for approximately $73 million
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
net of any withholding taxes. The Company recognized a gain on the sale of approximately $7 million. Goodwill
of $4 million was written off in connection with the gain on sale.
Information for business components included in discontinued operations is as follows:
December 31,
2010 2009 2008
(in millions)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $491 $ 736 $972
Income from operations of discontinued businesses, before taxes . . . . . . . . . . . . . . . . . . . . $ 77 $ 99 $104
Income tax expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) (3) (7)
Income from operations of discontinued businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 75 $ 96 $ 97
Gain (loss) on disposal of discontinued businesses, after taxes . . . . . . . . . . . . . . . . . . . . . . $ 64 $(150) $ 6
As further discussed in Note 22—Acquisitions and Dispositions, in February 2008, the Company entered
into an agreement to sell two of its wholly owned subsidiaries in Kazakhstan, AES Ekibastuz LLP (“Ekibastuz”)
and Maikuben West LLP (“Maikuben”). These businesses are included in the Europe Generation segment. The
sale was completed on May 30, 2008. As a result of AES’ continuing involvement in the management and
operations of the businesses after the sale was completed, their results of operations continued to be reflected as
part of income from continuing operations for all periods presented. Revenue recognized subsequent to the sale
represented the management fees earned for the Company’s continued management of the operations of the
businesses.
22. ACQUISITIONS AND DISPOSITIONS

Acquisitions
The Company completed its acquisition of the Ballylumford Power Station in the third quarter of 2010 and
in accordance with the accounting guidance for business combinations, has recorded the preliminary amounts for
the purchase price allocation. The purchase price allocation is preliminary and adjustments will continue to be
made during the measurement period. Subsequent adjustments, if any, will be retrospectively adjusted in future
filings with the SEC.
In April 2008, the Company completed the purchase of a 92% interest in a 660 gross MW coal-fired thermal
power generation facility in Masinloc, Philippines (“Masinloc”) from the Power Sector Assets & Liabilities
Management Corporation, a state enterprise, for $930 million in cash. Project financing of $665 million was
obtained from International Finance Corporation (“IFC”), the Asian Development Bank and a consortium of
commercial banks. IFC is also an 8% minority shareholder in Masinloc. AES immediately embarked upon a
comprehensive rehabilitation program to improve the output, reliability and general condition of the plant.
Including transaction costs and completion of the planned upgrade program to improve environmental and
operational performance, the total project cost was approximately $1.1 billion. Beginning on the acquisition date
in April 2008, the results of operations of Masinloc are reflected in the Consolidated Financial Statements. The
Company finalized the purchase price allocation of this acquisition in the fourth quarter of 2008.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Dispositions
On May 30, 2008, the Company completed the sale of two of its wholly owned subsidiaries in Kazakhstan,
Ekibastuz, a coal-fired generation plant, and Maikuben, a coal mine. Total consideration received in the
transaction was approximately $1.1 billion plus additional potential earn-out provisions, a three-year
management and operation agreement and a capital expenditures program bonus. Due to the fact that AES was to
have significant continuing involvement in the management and operations of the businesses through its three-
year management and operation agreement, the results of operations from Ekibastuz and Maikuben were
included in income from continuing operations through the date of the disposition. Income earned as a result of
the three-year management and operation agreement has been recognized as management fee income for all
periods subsequent to the disposition.
On March 23, 2009, the Company and Kazakhmys PLC (“Kazakhmys”), which purchased the subsidiaries,
mutually agreed to terminate the original sale agreement and the three-year management and operation
agreement. In connection with the termination of these agreements, the Company and Kazakhmys entered into a
new agreement (the “2009 Agreement”). Under the 2009 Agreement, Kazakhmys agreed to pay the Company an
$80 million performance incentive bonus in April 2009 for management services provided in 2008. This was
recognized as “Other Income” during the first quarter of 2009. A $13 million gain was recognized related to a
reversal of a tax contingency for a contractual obligation, under which the Company provided indemnification to
Kazakhmys, which expired in January 2009. This was recorded as an adjustment to the gain on the sale of
Ekibastuz and Maikuben during the first quarter of 2009.
The 2009 agreement also provided for an additional $102 million payment, primarily related to the
termination of the management agreement, payable to AES in January 2010. In May 2009, Kazakhmys provided
an irrevocable standby letter of credit from a creditworthy institution to AES of $102 million to secure the final
payment. The payment of the final component of the management termination agreement was not contingent
upon any future events. As a result, the Company recognized an additional gain on the sale of Ekibastuz and
Maikuben of approximately $98.5 million in the second quarter of 2009. AES received the final payment of $102
million from Kazakhmys in January 2010.
The parties agreed to terminate both the Stock Purchase Agreement and the Management Agreement, and
have further agreed to a mutual release of prior claims. As part of the management termination agreement, AES
agreed to transition the management of the businesses to Kazakhmys over a period of 100 days from March 13,
2009. The transition period ended June 21, 2009 and at that time the management of Ekibastuz and Maikuben
became the responsibility of Kazakhmys. The Company’s involvement with the businesses remained in place for
more than one year from the date of the sale; therefore, the Company has continued to include the businesses as
part of continuing operations in the Consolidated Financial Statements for all periods presented, despite the
termination of the management agreement.
Excluding income earned under the three-year management and operation agreement (terminated in March
2009), Ekibastuz and Maikuben generated no revenue or net income in 2010 and 2009 and generated revenue and
net income of $114 million and $61 million, respectively, for the year ended December 31, 2008.
23. EARNINGS PER SHARE

Basic and diluted earnings per share are based on the weighted average number of shares of common stock
and potential common stock outstanding during the period. Potential common stock, for purposes of determining
diluted earnings per share, includes the effects of dilutive restricted stock units, stock options and convertible
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
securities. The effect of such potential common stock is computed using the treasury stock method or the
if-converted method, as applicable.
The following table presents a reconciliation of the numerators and denominators of the basic and diluted
earnings per share computations for income from continuing operations. In the table below, income represents
the numerator (in millions) and shares represent the denominator (in millions):
December 31, 2010 December 31, 2009 December 31, 2008

$ per $ per $ per
Loss Shares Share Income Shares Share Income Shares Share
BASIC EARNINGS PER SHARE

Income (loss) from continuing
operations attributable to The AES
Corporation common stockholders . . . $ (86) 769 $(0.11) $710 667 $1.06 $1,170 669 $ 1.75
EFFECT OF DILUTIVE SECURITIES
Convertible securities . . . . . . . . . . . . . . . — — — — — — 22 15 (0.02)
Stock options . . . . . . . . . . . . . . . . . . . . . . — — — — 1 — — 4 —
Restricted stock units . . . . . . . . . . . . . . . — — — — 2 — — 1 —
DILUTED EARNINGS PER SHARE . . . . . . $ (86) 769 $(0.11) $710 670 $1.06 $1,192 689 $ 1.73
The calculation of diluted earnings per share at December 31, 2010 excluded all convertible securities, stock
options and restricted stock units because they are antidilutive.
The calculation of diluted earnings per share excluded 18,035,813 and 11,150,853 options outstanding at
December 31, 2009 and 2008, respectively, that could potentially dilute basic earnings per share in the future.
Those options were not included in the computation of diluted earnings per share because the exercise price of
those options exceeded the average market price during the related period. In 2009, all convertible debentures
were omitted from the earnings per share calculation because they were antidilutive. In 2008, all convertible
debentures were included in the earnings per share calculation. In arriving at income attributable to AES
Corporation common stockholders in computing basic earnings per share, dividends on preferred stock of our
subsidiary were deducted.
In addition, on March 15, 2010, the Company issued 125,468,788 shares of common stock to an investor as
described in Note 14—Equity.
24. RISKS AND UNCERTAINTIES

AES is a global power producer in 28 countries on five continents. See additional discussion of the
Company’s principal markets in Note 15—Segment and Geographic Information. Our principal lines of business
are Generation and Utilities. The Generation line of business uses a wide range of technologies, including coal,
gas, hydroelectric, and biomass as fuel to generate electricity. Our Utilities business is comprised of businesses
that transmit, distribute, and in certain circumstances, generate power. In addition, the Company continues to
expand its reach into the renewables area. These efforts include projects primarily in wind and solar.
POLITICAL AND ECONOMIC RISKS—The Company’s market capitalization was negatively impacted
largely in the second half of 2008 and in 2009. During this period, credit markets and global markets deteriorated
and experienced increased market volatility, which can pose risks to the overall liquidity and/or asset values of
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
our businesses with heightened unpredictability in currencies, counterparty credit risk and the widening of credit
spreads in certain markets. If market conditions are protracted or continue to deteriorate, the Company may be at
risk of decreased earnings and cash flows due to, among other factors, adverse fluctuations in the commodities
and foreign currency spot markets or deterioration in global macroeconomic conditions. With the tightening of
the credit markets, there is a risk that future investments may not be able to be financed through accessing capital
and debt markets and may be subject to restrictions in the near future.
Currently, the Company has a below-investment grade rating from Standard & Poor’s of BB-. This may
limit the ability of the Company to finance new and existing development projects to cash currently available on
hand and through reinvestment of earnings. As of December 31, 2010, the Company had $2.6 billion of
unrestricted cash and cash equivalents.
During 2010, approximately 84% of our revenue, and all of our revenue from discontinued businesses, was
generated outside the United States and a significant portion of our international operations is conducted in
developing countries. We continue to invest in projects in developing countries because the growth rates and the
opportunity to implement operating improvements and achieve higher operating margins may be greater than
those typically achievable in more developed countries. International operations, particularly the operation,
financing and development of projects in developing countries, entail significant risks and uncertainties,
including, without limitation:
• economic, social and political instability in any particular country or region;
• ability to economically hedge energy prices;
• volatility in commodity prices;
• adverse changes in currency exchange rates;
• government restrictions on converting currencies or repatriating funds;
• unexpected changes in foreign laws and regulations or in trade, monetary or fiscal policies;
• high inflation and monetary fluctuations;
• restrictions on imports of coal, oil, gas or other raw materials required by our generation businesses to
operate;
• threatened or consummated expropriation or nationalization of our assets by foreign governments;
• unwillingness of governments, government agencies, similar organizations or other counterparties to
honor their contracts;
• unwillingness of governments, government agencies, courts or similar bodies to enforce contracts that
are economically advantageous to subsidiaries of the Company and economically unfavorable to
counterparties, against such counterparties, whether such counterparties are governments or private
parties;
• inability to obtain access to fair and equitable political, regulatory, administrative and legal systems;
• adverse changes in government tax policy;
• difficulties in enforcing our contractual rights or enforcing judgments or obtaining a just result in local
jurisdictions; and
• potentially adverse tax consequences of operating in multiple jurisdictions.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Any of these factors, individually or in combination with others, could materially and adversely affect our
business, results of operations and financial condition. In addition, our Latin American operations experience
volatility in revenue and earnings which have caused and are expected to cause significant volatility in our results
of operations and cash flows. The volatility is caused by regulatory and economic difficulties, political instability
and currency fluctuations being experienced in many of these countries. This volatility reduces the predictability
and enhances the uncertainty associated with cash flows from these businesses.
Our inability to predict, influence or respond appropriately to changes in law or regulatory schemes,
including any inability to obtain expected or contracted increases in electricity tariff rates or tariff adjustments
for increased expenses, could adversely impact our results of operations or our ability to meet publicly
announced projections or analysts’ expectations. Furthermore, changes in laws or regulations or changes in the
application or interpretation of regulatory provisions in jurisdictions where we operate, particularly our Utilities
businesses where electricity tariffs are subject to regulatory review or approval, could adversely affect our
business, including, but not limited to:
• changes in the determination, definition or classification of costs to be included as reimbursable or
pass-through costs;
• changes in the definition or determination of controllable or noncontrollable costs;
• adverse changes in tax law;
• changes in the definition of events which may or may not qualify as changes in economic equilibrium;
• changes in the timing of tariff increases;
• other changes in the regulatory determinations under the relevant concessions; or
• changes in environmental regulations, including regulations relating to GHG emissions in any of our
businesses.
Any of the above events may result in lower margins for the affected businesses, which can adversely affect
our business.
RISKS RELATED TO FOREIGN CURRENCIES—AES operates businesses in many foreign countries

and such operations may be impacted by significant fluctuations in foreign currency exchange rates. The
Company’s financial position and results of operations have been significantly affected by fluctuations in the
value of the Brazilian real, the Argentine peso, the Dominican Republic peso, the Euro, the Chilean peso, the
Colombian peso and the Philippine peso relative to the U.S. Dollar.
RISKS RELATED TO POWER SALES CONTRACTS—Several of the Company’s power plants rely on
power sales contracts with one or a limited number of entities for the majority of, and in some case all of, the
relevant plant’s output over the term of the power sales contract. The remaining term of the power sales contracts
related to the Company’s power plants range from less than one to 38 years. No single customer accounted for
10% or more of total revenue in 2010, 2009, or 2008.
The cash flows and results of operations of such plants are dependent on the credit quality of the purchasers
and the continued ability of their customers and suppliers to meet their obligations under the relevant power sales
contract. If a substantial portion of the Company’s long-term power sales contracts were modified or terminated,
the Company would be adversely affected to the extent that it was unable to find other customers at the same
level of contract profitability. The loss of one or more significant power sales contracts or the failure by any of
the parties to a power sales contract to fulfill its obligations thereunder could have a material adverse impact on
the Company’s cash flow, results of operations and financial condition.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
25. RELATED PARTY TRANSACTIONS

Our generation businesses in Panama are partially owned by the Government of Panama (the “Panamanian
Government”). The Panamanian Government, in turn, partially owns the distribution companies within Panama.
For the years ended December 31, 2010, 2009 and 2008, our Panamanian businesses recognized electricity sales
to the Panamanian Government totaling $146 million, $143 million and $203 million, respectively. For the same
period, our Panamanian businesses purchased electricity, which excludes transmission charges from the
Panamanian Government, totaling $21 million, $25 million and $27 million, respectively. As of December 31,
2010 and 2009, our Panamanian businesses owed the Panamanian Government $4 million and $7 million,
respectively, payable on normal trade terms. For the same period, the Panamanian Government owed our
Panamanian businesses $12 million and $25 million, respectively, payable on normal trade terms.
Our generation businesses in the Dominican Republic are partially owned by the Government of the
Dominican Republic (the “Dominican Government”). The Dominican Government, in turn, owns the distribution
companies within the Dominican Republic. For the years ended December 31, 2010, 2009 and 2008, our
Dominican Republic businesses recognized electricity sales to the Dominican Government totaling $179 million,
$204 million and $244 million, respectively. For the same period, the Dominican Government owed our
Dominican Republic businesses $88 million and $121 million, respectively, payable on normal trade terms.
In December 2010, ESSA , one of our subsidiaries in Latin America, signed termination agreements related
to its long term gas transportation contracts that were under dispute in arbitration tribunals. As a result of these
settlements, ESSA paid $52 million to two of the gas transportation companies which are related parties and
recorded a loss of $43 million. In addition, an aggregate amount of $16 million was payable to these related
parties at December 31, 2010. See Note 12—Contingencies, Litigations for details.
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THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
26. SELECTED QUARTERLY FINANCIAL DATA (UNAUDITED)

Quarterly Financial Data
The following tables summarize the unaudited quarterly statements of operations for the Company for 2010
and 2009. Amounts reflect all adjustments necessary in the opinion of management for a fair statement of the
results for interim periods. Amounts have been restated to reflect discontinued operations in all periods
presented.
Quarter ended 2010

Mar 31 June 30 Sept 30 Dec 31
(in millions, except per share data)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,071 $4,021 $4,151 $4,404
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 986 982 985 1,011
Income (loss) from continuing operations, net of tax(1)
................. 392 411 296 (179)
Discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 18 101 10
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 402 429 397 (169)
Net income (loss) attributable to The AES Corporation . . . . . . . . . . . . . . . . $ 187 $ 144 $ 114 $ (436)
Basic income per share:
Income (loss) from continuing operations attributable to
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.26 $ 0.17 $ 0.05 $ (0.56)
Discontinued operations attributable to
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01 0.01 0.09 0.01
Basic income (loss) per share attributable to
The AES Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.27 $ 0.18 $ 0.14 $ (0.55)
Diluted income per share:
Income (loss) from continuing operations attributable to
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.26 $ 0.17 $ 0.05 $ (0.56)
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.01 0.01 0.09 0.01
Diluted income (loss) per share attributable to
275
THE AES CORPORATION
DECEMBER 31, 2010, 2009, AND 2008
Quarter ended 2009

Mar 31 June 30 Sept 30 Dec 31
(in millions, except per share data)
Revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3,235 $3,291 $3,652 $3,776
Gross margin . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 849 803 967 814
Income from continuing operations, net of tax(2)
...................... 483 503 414 409
Discontinued operations, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 27 26 (126)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 530 440 283
Net income (loss) attributable to The AES Corporation . . . . . . . . . . . . . . . . $ 218 $ 303 $ 185 $ (48)
Basic income (loss) per share:
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.31 $ 0.43 $ 0.26 $ 0.07
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.02 0.02 0.02 (0.14)
Basic income (loss) per share attributable to
Diluted income (loss) per share:
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 0.31 $ 0.43 $ 0.26 $ 0.07
The AES Corporation, net of tax . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 0.02 0.02 0.02 (0.14)
Diluted income (loss) per share attributable to
(1) Includes pretax impairment expense of $314 million and $927 million, for the third and fourth quarters of
2010, respectively. See Note 19—Impairment Expense and Note 8—Goodwill and Other Intangible Assets
for additional discussion on these impairment expenses.
(2) Includes pretax impairment expense $140 million for the fourth quarter of 2009. See Note 19—Impairment
Expense and Note 8—Goodwill and Other Intangible Assets for additional discussion on the impairment
expense.
27. SUBSEQUENT EVENTS

million authorized remained available under the stock repurchase program. For additional information, see Note
14—Equity.
276
ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE
None.
ITEM 9A. CONTROLS AND PROCEDURES

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures
The Company maintains disclosure controls and procedures that are designed to ensure that information
required to be disclosed in the reports that the Company files or submits under the Securities Exchange Act of
1934, as amended (the “Exchange Act”), is recorded, processed, summarized and reported within the time
periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to
the chief executive officer (“CEO”) and chief financial officer (“CFO”), as appropriate, to allow timely decisions
regarding required disclosures.
The Company carried out the evaluation required by Rules 13a-15(b) and 15d-15(b), under the supervision
and with the participation of our management, including the CEO and CFO, of the effectiveness of our
“disclosure controls and procedures” (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)). Based
upon this evaluation, the CEO and CFO concluded that as of December 31, 2010, our disclosure controls and
procedures were effective.
Management’s Report on Internal Control Over Financial Reporting

Management of the Company is responsible for establishing and maintaining adequate internal control over
financial reporting, as defined in Rule 13a-15(f) under the Exchange Act. The Company’s internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external purposes in accordance with GAAP and
includes those policies and procedures that:
• pertain to the maintenance of records that in reasonable detail, accurately and fairly reflect the
transactions and dispositions of the assets of the Company;
• provide reasonable assurance that transactions are recorded as necessary to permit preparation of
financial statements in accordance with GAAP, and that receipts and expenditures of the Company are
being made only in accordance with authorizations of management and directors of the Company; and
• provide reasonable assurance that unauthorized acquisition, use or disposition of the Company’s assets
that could have a material effect on the financial statements are prevented or detected timely.
Management, including our CEO and CFO, does not expect that our internal controls will prevent or detect
all errors and all fraud. A control system, no matter how well designed and operated, can provide only
reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a
control system must reflect the fact that there are resource constraints, and the benefits of controls must be
considered relative to their costs. In addition, any evaluation of the effectiveness of controls is subject to risks
that those internal controls may become inadequate in future periods because of changes in business conditions,
or that the degree of compliance with the policies or procedures deteriorates.
Management assessed the effectiveness of our internal control over financial reporting as of December 31,
2010. In making this assessment, management used the criteria established in Internal Control—Integrated
Framework issued by the Committee of Sponsoring Organizations (“COSO”). Based on this assessment
management, believes that the Company maintained effective internal control over financial reporting as of
December 31, 2010.
277
The effectiveness of the Company’s internal control over financial reporting as of December 31, 2010, has
been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report,
which appears herein.
Changes in Internal Control Over Financial Reporting:

There were no changes that occurred during the quarter ended December 31, 2010 that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.
278
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholders of The AES Corporation:
We have audited The AES Corporation’s internal control over financial reporting as of December 31, 2010
based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring
Organizations of the Treadway Commission (the COSO criteria). The AES Corporation’s management is
responsible for maintaining effective internal control over financial reporting, and for its assessment of the
effectiveness of internal control over financial reporting included in the accompanying Management’s Report on
Internal Control over Financial Reporting. Our responsibility is to express an opinion on the company’s internal
control over financial reporting based on our audit.
We conducted our audit in accordance with the standards of the Public Company Accounting Oversight
Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance
about whether effective internal control over financial reporting was maintained in all material respects. Our
audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a
material weakness exists, testing and evaluating the design and operating effectiveness of internal control based
on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We
believe that our audit provides a reasonable basis for our opinion.
A company’s internal control over financial reporting is a process designed to provide reasonable assurance
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles. A company’s internal control over financial reporting
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail,
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance
with generally accepted accounting principles, and that receipts and expenditures of the company are being made
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable
assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the
company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect
misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that
controls may become inadequate because of changes in conditions, or that the degree of compliance with the
policies or procedures may deteriorate.
In our opinion, The AES Corporation maintained, in all material respects, effective internal control over
financial reporting as of December 31, 2010, based on the COSO criteria.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board
(United States), the consolidated balance sheets of The AES Corporation and subsidiaries as of December 31,
2010 and 2009, and the related consolidated statements of operations, stockholders’ equity and cash flows for
each of the three years in the period ended December 31, 2010 and our report dated February 25, 2011 expressed
an unqualified opinion thereon.
/s/ Ernst & Young LLP
McLean, Virginia
February 25, 2011
279
ITEM 9B. OTHER INFORMATION.
None.
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
The following information is incorporated by reference from the Registrant’s Proxy Statement for the
Registrant’s 2011 Annual Meeting of Stock Holders which the Registrant expects will be filed on or around
March 1, 2011 (the “2011 Proxy Statement”):
• Information regarding the directors required by this item found under the heading Board of Directors
• Information regarding AES’ Code of Ethics found under the heading AES Code of Business Conduct
and Corporate Governance Guidelines
• Information regarding compliance with Section 16 of the Exchange Act required by this item found
under the heading Governance Matters—Section 16(a) Beneficial Ownership Reporting Compliance
• Information regarding AES’ Financial Audit Committee found under the heading The Committees of
the Board—Financial Audit Committee (the “Audit Committee”)
Certain information regarding executive officers required by this Item is set forth as a supplementary item in
Part I hereof (pursuant to Instruction 3 to Item 401(b) of Regulation S-K). The other information required by this
Item, to the extent not included above, will be contained in our 2011 Proxy Statement and is herein incorporated
by reference.
ITEM 11. EXECUTIVE COMPENSATION

The following information is contained in the 2011 Proxy Statement and is incorporated by reference: the
information regarding executive compensation contained under the heading Compensation Discussion and
Analysis and the Compensation Committee Report on Executive Compensation under the heading Report of the
Compensation Committee.
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
RELATED STOCKHOLDER MATTERS
(a) Security Ownership of Certain Beneficial Owners.
See the information contained under the caption “Security Ownership of Certain Beneficial Owners,
Directors, and Executive Officers” of the Proxy Statement for the 2011 Annual Meeting of Shareholders of the
Registrant, which information is incorporated herein by reference.
(b) Security Ownership of Directors and Executive Officers.
See the information contained under the caption “Security Ownership of Certain Beneficial Owners,
Directors, and Executive Officers” of the Proxy Statement for the 2011 Annual Meeting of Shareholders of the
Registrant, which information is incorporated herein by reference.
(c) Changes in Control.
None.
280
(d) Securities Authorized for Issuance under Equity Compensation Plans.
The following table provides information about shares of AES common stock that may be issued under
AES’ equity compensation plans, as of December 31, 2010:
Securities Authorized for Issuance under Equity Compensation Plans (As of December 31, 2010)
(a) (b) (c)
Number of securities
remaining available for
Number of securities to Weighted average future issuance under
be issued upon exercise exercise price of equity compensation plans
of outstanding options, outstanding options, (excluding securities
Plan category warrants and rights warrants and rights reflected in column (a))
Equity compensation plans

approved by security holders(1) . . . . . . . . . . 21,128,007(2) $17.21 19,723,531
Equity compensation plans not
approved by security holders(3) . . . . . . . . . . 5,618,255 $13.15 —
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26,746,262 $16.10 19,723,531
(1) The following equity compensation plans have been approved by the Company’s Stockholders:
(A) The LTC Plan was adopted in 2003 and provided for 17,000,000 shares authorized for issuance
thereunder. In 2008, an amendment to the Plan to provide an additional 12,000,000 shares was
approved by AES’ stockholders, bringing the total authorized shares to 29,000,000. In 2010, an
additional amendment to the Plan to provide an additional 9,000,000 shares was approved by AES’
stockholders, bringing the total authorized shares to 38,000,000. The weighted average exercise price
of Options outstanding under this plan included in Column (b) is $14.87 (excluding RSU awards), with
19,723,351 shares available for future issuance.
(B) The AES Corporation 2001 Stock Option Plan adopted in 2001 provided for 15,000,000 shares
authorized for issuance. The weighted average exercise price of Options outstanding under this plan
included in Column (b) is $14.95. In conjunction with the 2010 amendment to the 2003 Long Term
Compensation plan, ongoing award issuance from this plan was discontinued in 2010. Any remaining
shares under this plan, which are not reserved for issuance under outstanding awards, are not available
for future issuance and thus the amount of 2,067,856 shares is not included in Column (c) above.
(C) The AES Corporation 2001 Plan for Outside Directors adopted in 2001 provided for 2,750,000 shares
included in Column (b) is $11.70. In conjunction with the 2010 amendment to the 2003 Long Term
Compensation plan, ongoing award issuance from this plan was discontinued in 2010. Any remaining
shares under this plan, which are not reserved for issuance under outstanding awards, are not available
for future issuance and thus the amount of 2,194,404 shares is not included in Column (c) above.
(D) The AES Corporation Second Amended and Restated Deferred Compensation Plan for Directors
provided for 2,000,000 shares authorized for issuance. Column (b) excludes the Director stock units
granted thereunder. In conjunction with the 2010 amendment to the 2003 Long Term Compensation
Plan, ongoing award issuance from this plan was discontinued in 2010 as Director stock units will be
issued from the 2003 Long Term Compensation Plan. Any remaining shares under this plan, which are
not reserved for issuance under outstanding awards, are not available for future issuance and thus the
amount of 105,341 shares is not included in Column (c) above.
(E) The AES Corporation Incentive Stock Option Plan adopted in 1991 provided for 57,500,000 shares
included in Column (b) is $55.29. This plan terminated on June 1, 2001, such that no additional grants
may be granted under the plan after that date. Any remaining shares under this plan, which are not
reserved for issuance under outstanding awards, are not available for future issuance in light of this
plan’s termination and thus the amount 23,502,620 shares is not included in Column (c) above.
281
(2) Includes 5,448,036 (2,217,074 of which are vested and 3,230,962 are unvested) shares underlying RSU
awards (assuming performance at a maximum level), 778,328 shares underlying Director stock unit awards,
and 14,901,643 shares issuable upon the exercise of Stock Option grants, for an aggregate number of
21,128,007 shares.
(3) The AES Corporation 2001 Non-Officer Stock Option Plan provided for 12,000,000 shares authorized for
issuance. The weighted average exercise price of Options outstanding under this plan shown in Column
(b) is $13.15. In conjunction with the 2010 amendment to the 2003 Long Term Compensation plan, ongoing
award issuance from this plan was discontinued in 2010. Any remaining shares under this plan, which are
not reserved for issuance under outstanding awards, are not available for future issuance and thus the
amount of 1,549,919 shares is not included in Column (c) above. This plan is described in the narrative
below.
The AES Corporation 2001 Non-Officer Stock Option Plan (the “2001 Plan”) was adopted by the Board on
October 18, 2001, and became effective October 25, 2001. The 2001 Plan did not require approval of AES’
stockholders under SEC or NYSE rules and/or regulations at that time. All employees that are not Officers,
Directors or beneficial owners of more than 10% of AES’ common stock are eligible to participate in the 2001
Plan. The total aggregate number of shares for which Options can be granted pursuant to the 2001 Plan is 12
million. As of December 31, 2010, approximately 3,423 employees held Options under the 2001 Plan. The
exercise price of each Option awarded under the 2001 Plan is equal to the fair market value of AES’ common
stock on the grant date of the Option. Options under the 2001 Plan generally vest as to 50% of their underlying
shares on each anniversary of the Option grant date; however, grants dated October 25, 2001 vested in one year.
Unless otherwise provided by the Compensation Committee of the Board, upon the death or disability of an
employee, or a change of control (as defined therein), all Options granted under the 2001 Plan will become fully
vested and exercisable. Unless otherwise provided by the Compensation Committee of the Board, in the event
that the employee’s employment with the Company terminates for any reason other than death or disability, all
Options held by such employee will automatically expire on the earlier of (a) the date the Option would have
expired had the employee continued in such employment, and (b) 180 days after the date that such employee’s
employment ceases. The 2001 Plan will expire on October 25, 2011. The Board may amend, modify or terminate
the 2001 Plan at any time.
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR

INDEPENDENCE
The information regarding related party transactions required by this item is included in the 2011 Proxy
Statement found under the headings Transactions with Related Persons, Proposal I: Election of Directors and
The Committees of the Board and are incorporated herein by reference.
ITEM 14. PRINCIPAL ACCOUNTANT FEES AND SERVICES

The information concerning principal accountant fees and services included in the 2011 Proxy Statement
contained under the heading Information Regarding The Independent Registered Public Accounting Firm’s Fees,
Services and Independence and is incorporated herein by reference.
282
PART IV
ITEM 15. EXHIBITS AND FINANCIAL STATEMENT SCHEDULES

(a) Financial Statements.
Financial Statements and Schedules: Page
Consolidated Balance Sheets as of December 31, 2010 and 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 169

Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008 . . . . . . 170
Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008 . . . . . . 171
Consolidated Statements of Changes in Stockholders’ Equity for the years ended December 31, 2010,
2009 and 2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172
Notes to Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 173
Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2-S-8
(b) Exhibits.
3.1 Sixth Restated Certificate of Incorporation of The AES Corporation is incorporated herein by reference
to Exhibit 3.1 of the Company’s Form 10-K for the year ended December 31, 2008.
3.2 By-Laws of The AES Corporation, as amended and incorporated herein by reference to Exhibit 3.1 of the
Company’s Form 8-K filed on August 11, 2009.
4 There are numerous instruments defining the rights of holders of long-term indebtedness of the
Registrant and its consolidated subsidiaries, none of which exceeds ten percent of the total assets of the
Registrant and its subsidiaries on a consolidated basis. The Registrant hereby agrees to furnish a copy of
any of such agreements to the Commission upon request. Since these documents are not required filings
under Item 601 of Regulation S-K, the Company has elected to file certain of these documents as
Exhibits 4(a)—4(o).
4.(a) Junior Subordinated Indenture, dated as of March 1, 1997, between The AES Corporation and Wells
Fargo Bank, National Association, as successor to Bank One, National Association (formerly known as
The First National Bank of Chicago) is incorporated herein by reference to Exhibit 4.(a) of the
Company’s Form 10-K for the year ended December 31, 2008.
4.(b) Third Supplemental Indenture, dated as of October 14, 1999, between The AES Corporation and Wells
Fargo Bank, National Association, as successor to Bank One, National Association is incorporated herein
by reference to Exhibit 4.(b) of the Company’s Form 10-K for the year ended December 31, 2008.
4.(c) Senior Indenture, dated as of December 8, 1998, between The AES Corporation and Wells Fargo Bank,
National Association, as successor to Bank One, National Association (formerly known as The First
National Bank of Chicago) is incorporated herein by reference to Exhibit 4.01 of the Company’s
Form 8-K filed on December 11, 1998.
4.(d) Form of Second Supplemental Indenture, dated as of June 11, 1999, between The AES Corporation and
Wells Fargo Bank, National Association, as successor to Bank One, National Association (formerly
known as The First National Bank of Chicago) is incorporated herein by reference to Exhibit 4.01 of the
Company’s Form 8-K filed on June 11, 1999.
4.(e) Third Supplemental Indenture, dated as of September 12, 2000, between The AES Corporation and Wells
Fargo Bank, National Association, as successor to Bank One, National Association is incorporated herein
by reference to Exhibit 4.(e) of the Company’s Form 10-K for the year ended December 31, 2008.
4.(f) Form of Fifth Supplemental Indenture, dated as of February 9, 2001, between The AES Corporation and
Wells Fargo Bank, National Association, as successor to Bank One, National Association is incorporated
herein by reference to Exhibit 4.1 of the Company’s Form 8-K filed on February 8, 2001.
283
4.(g) Form of Sixth Supplemental Indenture, dated as of February 22, 2001, between The AES Corporation
and Wells Fargo Bank, National Association, as successor to Bank One, National Association is
incorporated herein by reference to Exhibit 4.1 of the Company’s Form 8-K filed on February 21, 2001.
4.(h) Ninth Supplemental Indenture, dated as of April 3, 2003, between The AES Corporation and Wells
Fargo Bank, National Association (as successor by consolidation to Wells Fargo Bank Minnesota,
National Association) is incorporated herein by reference to Exhibit 4.6 of the Company’s Form S-4
filed on December 7, 2007.
4.(i) Form of Tenth Supplemental Indenture, dated as of February 13, 2004, between The AES Corporation
and Wells Fargo Bank, National Association (as successor by consolidation to Wells Fargo Bank
Minnesota, National Association) is incorporated herein by reference to Exhibit 4.1 of the Company’s
Form 8-K filed on February 13, 2004.
4.(j) Eleventh Supplemental Indenture, dated as of October 15, 2007, between The AES Corporation and
Wells Fargo Bank, National Association is incorporated herein by reference to Exhibit 4.7 of the
Company’s Form S-4 filed on December 7, 2007.
4.(k) Twelfth Supplemental Indenture, dated as of October 15, 2007, between The AES Corporation and
Wells Fargo Bank, National Association is incorporated herein by reference to Exhibit 4.8 of the
Company’s Form S-4 filed on December 7, 2007.
4.(l) Thirteenth Supplemental Indenture, dated as of May 19, 2008, between The AES Corporation and Wells
Fargo Bank, National Association is incorporated herein by reference to Exhibit 4.(l) of the Company’s
Form 10-K for the year ended December 31, 2008.
4.(m) Fourteenth Supplemental indenture, dated as of April 2, 2009, between The AES Corporation and Wells
Fargo Bank, National Association is incorporated herein by reference to Exhibit 99.1 of the Company’s
Form 8-K filed on April 2, 2009.
4.(n) Senior Indenture, dated as of May 8, 2003, between The AES Corporation and Wells Fargo Bank,
National Association (as successor by consolidation to Wells Fargo Bank Minnesota, National
Association) is incorporated herein by reference to Exhibit 4.(m) of the Company’s Form 10-K for the
year ended December 31, 2008.
4.(o) First Supplemental Indenture, dated as of May 28, 2008, between The AES Corporation and Wells
Fargo Bank, National Association is incorporated herein by reference to Exhibit 4.(n) of the Company’s
10.1 The AES Corporation Profit Sharing and Stock Ownership Plan are incorporated herein by reference to
Exhibit 4(c)(1) of the Registration Statement on Form S-8 (Registration No. 33-49262) filed on July 2,
1992.
10.2 The AES Corporation Incentive Stock Option Plan of 1991, as amended, is incorporated herein by
reference to Exhibit 10.30 of the Company’s Form 10-K for the year ended December 31, 1995.
10.3 Applied Energy Services, Inc. Incentive Stock Option Plan of 1982 is incorporated herein by reference
to Exhibit 10.31 of the Registration Statement on Form S-1 (Registration No. 33-40483).
10.4 Deferred Compensation Plan for Executive Officers, as amended, is incorporated herein by reference to
Exhibit 10.32 of Amendment No. 1 to the Registration Statement on Form S-1(Registration
No. 33-40483).
10.5 Deferred Compensation Plan for Directors is incorporated herein by reference to Exhibit 10.9 of the
Company’s Form 10-Q for the quarter ended March 31, 1998.
10.6 The AES Corporation Stock Option Plan for Outside Directors as amended is incorporated herein by
reference to Appendix C of the Registrant’s 2003 Proxy Statement filed on March 25, 2003.
284
10.7 The AES Corporation Supplemental Retirement Plan is incorporated herein by reference to
Exhibit 10.63 of the Company’s Form 10-K for the year ended December 31, 1994.
10.7A Amendment to The AES Corporation Supplemental Retirement Plan, dated March 13, 2008 is
incorporated herein by reference to Exhibit 10.9.A of the Company’s Form 10-K for the year ended
December 31, 2007.
10.8 The AES Corporation 2001 Stock Option Plan is incorporated herein by reference to Exhibit 10.12
of the Company’s Form 10-K for the year ended December 31, 2000.
10.9 Second Amended and Restated Deferred Compensation Plan for Directors is incorporated herein by
reference to Exhibit 10.13 of the Company’s Form 10-K for the year ended December 31, 2000.
10.10 The AES Corporation 2001 Non-Officer Stock Option Plan is incorporated herein by reference to
Exhibit 10.12 of the Company’s Form 10-K for the year ended December 31, 2002.
10.10A Amendment to the 2001 Stock Option Plan and 2001 Non-Officer Stock Option Plan, dated
March 13, 2008 is incorporated herein by reference to Exhibit 10.12.A of the Company’s Form 10-K
for the year ended December 31, 2007.
10.11 The AES Corporation 2003 Long Term Compensation Plan, as amended and restated on April 22,
2010, is incorporated herein by reference to Exhibit 10.1 of the Company’s Form 8-K filed on
April 27, 2010.
10.12 Form of AES 2010 Nonqualified Stock Option Award Agreement under The AES Corporation 2003
Long Term Compensation Plan (Outside Directors) is incorporated herein by reference to
Exhibit 10.2 of the Company’s Form 8-K filed on April 27, 2010.
10.13 Form of AES Performance Stock Unit Award Agreement under The AES Corporation 2003 Long
Term Compensation Plan (filed herewith).
10.14 Form of AES Restricted Stock Unit Award Agreement under The AES Corporation 2003 Long Term
Compensation Plan (filed herewith).
10.15 Form of AES Executive Stock Option Unit Award Agreement under The AES Corporation 2003
Long Term Compensation Plan (filed herewith).
10.16 The AES Corporation Restoration Supplemental Retirement Plan, as amended and restated, dated
December 29, 2008 is incorporated herein by reference to Exhibit 10.15 of the Company’s
10.17 The AES Corporation International Retirement Plan, as amended and restated on December 29, 2008
is incorporated herein by reference to Exhibit 10.16 of the Company’s Form 10-K for the year ended
December 31, 2008.
10.18 The AES Corporation Severance Plan, as amended and restated on December 10, 2010 (filed
herewith).
10.19 The AES Corporation Performance Incentive Plan, as amended and restated on April 22, 2010 is
incorporated herein by reference to Exhibit 10.4 of the Company’s Form 8-K filed on April 27,
2010.
10.20 The AES Corporation Deferred Compensation Program For Directors dated April 22, 2010, is
incorporated herein by reference to Exhibit 10.4 of the Company’s Form 8-K filed on April 27,
2010.
10.21 Amendment No. 2 to the Fourth Amended and Restated Credit and Reimbursement Agreement dated
as of July 29, 2010 among the Company, the Subsidiary Guarantors, Citicorp USA, Inc., as
Administrative Agent, Citibank N.A. as Collateral Agent and various lenders named therein is
incorporated herein by reference to Exhibit 10.1 of the Company’s Form 8-K filed on July 30, 2010.
285
10.21.A Fifth Amended and Restated Credit and Reimbursement Agreement dated as of July 29, 2010
among The AES Corporation, a Delaware corporation, the Subsidiary Guarantors listed herein, the
Banks listed on the signature pages thereof, Citicorp USA, Inc., as Administrative Agent, Citibank,
N.A. as Collateral Agent, Citigroup Global Markets Inc., as Lead Arranger and Book Runner,
Banc of America Securities LLC, as Lead Arranger and Book Runner and Co-Syndication Agent,
Barclays Capital, as Lead Arranger and Book Runner and Co-Syndication Agent, RBS Securities
Inc., as Lead Arranger and Book Runner and Co-Syndication Agent, RBS Securities Inc., as lead
Arranger and Book Runner and Co-Syndication Agent, and Union Bank, N.A., as Lead Arranger
and Book Runner and Co-Syndication Agent is incorporated herein by reference to Exhibit 10.1.A
of the Company’s Form 8-K filed on July 30, 2010.
10.21.B Appendices and Exhibits to the Fifth Amended and Restated Credit and Reimbursement
Agreement, dated as of July 29, 2010 is incorporated herein by reference to Exhibit 10.1.B of the
Company’s Form 8-K filed on July 30, 2010.
10.22 Collateral Trust Agreement dated as of December 12, 2002 among The AES Corporation, AES
International Holdings II, Ltd., Wilmington Trust Company, as corporate trustee and Bruce L.
Bisson, an individual trustee is incorporated herein by reference to Exhibit 4.2 of the Company’s
Form 8-K filed on December 17, 2002.
10.23 Security Agreement dated as of December 12, 2002 made by The AES Corporation to Wilmington
Trust Company, as corporate trustee and Bruce L. Bisson, as individual trustee is incorporated
herein by reference to Exhibit 4.3 of the Company’s Form 8-K filed on December 17, 2002.
10.24 Charge Over Shares dated as of December 12, 2002 between AES International Holdings II, Ltd.
and Wilmington Trust Company, as corporate trustee and Bruce L. Bisson, as individual trustee is
incorporated herein by reference to Exhibit 4.4 of the Company’s Form 8-K filed on December 17,
2002.
10.25 Stock Purchase Agreement between The AES Corporation and Terrific Investment Corporation
dated November 6, 2009 is incorporated herein by reference to Exhibit 10.1 of the Company’s
form 8-K filed on November 11, 2009.
10.26 Stockholder Agreement between The AES Corporation and Terrific Investment Corporation dated
March 12, 2010 is incorporated herein by reference to Exhibit 10.1 of the Company’s Form 8-K
filed on March 15, 2010.
12 Statement of computation of ratio of earnings to fixed charges (filed herewith).
21 Subsidiaries of The AES Corporation (filed herewith).
23.1 Consent of Independent Registered Public Accounting Firm, Ernst & Young LLP (filed herewith).
24 Powers of Attorney (filed herewith).
31.1 Rule 13a-14(a)/15d-14(a) Certification of Paul Hanrahan (filed herewith).
31.2 Rule 13a-14(a)/15d-14(a) Certification of Victoria D. Harker (filed herewith).
32.1 Section 1350 Certification of Paul Hanrahan (filed herewith).
32.2 Section 1350 Certification of Victoria D. Harker (filed herewith).
101.INS XBRL Instance Document (furnished herewith as provided in Rule 406T of Regulation S-T).
101.SCH XBRL Taxonomy Extension Schema Document (furnished herewith as provided in Rule 406T of
Regulation S-T).
101.CAL XBRL Taxonomy Extension Calculation Linkbase Document (furnished herewith as provided in
Rule 406T of Regulation S-T).
286
101.DEF XBRL Taxonomy Extension Definition Linkbase Document (furnished herewith as provided in
101.LAB XBRL Taxonomy Extension Label Linkbase Document (furnished herewith as provided in Rule
406T of Regulation S-T).
101.PRE XBRL Taxonomy Extension Presentation Linkbase Document (furnished herewith as provided in
(c) Schedules
Schedule I—Condensed Financial Information of Registrant

Schedule II—Valuation and Qualifying Accounts
287
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the
Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
THE AES CORPORATION

(Company)
Date: February 25, 2011 By: /s/ PAUL HANRAHAN
Name: Paul Hanrahan
President, Chief Executive Officer
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this report has been
signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.
Name Title Date
* President, Chief Executive Officer February 25, 2011

Paul Hanrahan (Principal Executive Officer)
and Director
* Director February 25, 2011
Samuel W. Bodman, III

Kristina Johnson

Tarun Khanna

John A. Koskinen

Philip Lader

John B. Morse

Sandra O. Moose
* Chairman of the Board and February 25, 2011

Philip A. Odeen Lead Independent Director
Charles O. Rossotti

Sven Sandstrom
/s/ VICTORIA D. HARKER Executive Vice President and February 25, 2011
Victoria D. Harker Chief Financial Officer
(Principal Financial Officer)
/s/ MARY WOOD Vice President and Controller February 25, 2011
Mary Wood (Principal Accounting Officer)
*BY: /s/ BRIAN A. MILLER February 25, 2011
Attorney-in-fact
288
THE AES CORPORATION AND SUBSIDIARIES
INDEX TO FINANCIAL STATEMENT SCHEDULES
Schedule I—Condensed Financial Information of Registrant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-2

Schedule II—Valuation and Qualifying Accounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . S-8
Schedules other than those listed above are omitted as the information is either not applicable, not required,
or has been furnished in the financial statements or notes thereto included in Item 8 hereof.
S-1
THE AES CORPORATION
SCHEDULE I CONDENSED FINANCIAL INFORMATION OF REGISTRANT
UNCONSOLIDATED BALANCE SHEETS
December 31,
2010 2009
(in millions)
ASSETS
Current Assets:
Cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 594 $ 628
Restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 9
Accounts and notes receivable from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,031 514
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 27
Prepaid expenses and other current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 34
Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,689 1,212
Investment in and advances to subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9,240 8,639
Office Equipment:
Cost . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 86
Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (59) (47)
Office equipment, net . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34 39
Other Assets:
Deferred financing costs (net of accumulated amortization of $39 and $76, respectively) . . . 64 72
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 352 516
Other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 25
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 417 613
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,380 $10,503
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 2 $ 5
Accrued and other liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 208
Term loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 —
Senior notes payable—current portion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 214
Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 652 427
Long-term Liabilities:
Term loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . — 200
Senior notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,631 4,584
Junior subordinated notes and debentures payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 517 517
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107 100
Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,255 5,401
Stockholders’ equity:
Common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 7
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,444 6,868
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 650
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2,383) (2,724)
Treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (216) (126)
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,473 4,675
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,380 $10,503
See Notes to Schedule I
S-2
THE AES CORPORATION
STATEMENTS OF UNCONSOLIDATED OPERATIONS
For the Years Ended

December 31
2010 2009 2008
(in millions)
Revenues from subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 34 $ 39 $ 36
Equity in earnings of subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 590 983 2,019
Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 279 131 173
General and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (261) (218) (264)
Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (461) (485) (516)
Income (loss) before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 450 1,448
Income tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (172) 208 (214)
Net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 9 $ 658 $1,234
S-3
THE AES CORPORATION
STATEMENTS OF UNCONSOLIDATED CASH FLOWS
For the Years Ended

December 31,
2010 2009 2008
(in millions)
Net cash provided by operating activities . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 488 $ 178 $ 863
Investing Activities:
Investment in and advances to subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (1,185) (452) (1,098)
Acquisitions—net of cash acquired . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (3) (5) (95)
Return of capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 166 89
(Increase) decrease in restricted cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (2) 4 2
Additions to property, plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (22) (8) (23)
Net cash used in investing activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (912) (295) (1,125)
Financing Activities:
Borrowings of notes payable and other coupon bearing securities . . . . . . . . . . . . — 503 625
Repayments of notes payable and other coupon bearing securities . . . . . . . . . . . (914) (154) (1,037)
Loans (to) from subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (154) 205 90
Proceeds from issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,569 14 28
Purchase of treasury stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (99) — (143)
Payments for deferred financing costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (12) (23) (14)
Net cash provided by (used in) financing activities . . . . . . . . . . . . . . . . . . . 390 545 (451)
Increase (decrease) in cash and cash equivalents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (34) 428 (713)
Cash and cash equivalents, beginning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 628 200 913
Cash and cash equivalents, ending . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 594 $ 628 $ 200
Supplemental Disclosures:
Cash payments for interest, net of amounts capitalized . . . . . . . . . . . . . . . . . . . . $ 412 $ 410 $ 469
Cash payments for income taxes, net of refunds . . . . . . . . . . . . . . . . . . . . . . . . . . $ — $— $ —
S-4
THE AES CORPORATION
SCHEDULE I
NOTES TO SCHEDULE I
1. Application of Significant Accounting Principles

Accounting for Subsidiaries and Affiliates—The AES Corporation (the “Company”) has accounted for
the earnings of its subsidiaries on the equity method in the unconsolidated financial information.
Revenue—Construction management fees earned by the parent from its consolidated subsidiaries are
eliminated.
Income Taxes—Positions taken on the Company’s income tax return which satisfy a more-likely-than-not
threshold will be recognized in the financial statements. The unconsolidated income tax expense or benefit
computed for the Company reflects the tax assets and liabilities of the Company on a stand-alone basis and the
effect of filing a consolidated U.S. income tax return with certain other affiliated companies.
Accounts and Notes Receivable from Subsidiaries—such amounts have been shown in current or long-
term assets based on terms in agreements with subsidiaries, but payment is dependent upon meeting conditions
precedent in the subsidiary loan agreements.
Selected Unconsolidated Balance Sheet Data:
December 31, December 31,

2010 2009
(in millions)
Assets
Investment in and advances to subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . $ 9,240 $ 8,639
Deferred income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 352 $ 516
Total other assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 417 $ 613
Total assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,380 $10,503
Liabilities and Stockholders’ Equity
Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 107 $ 100
Total long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,255 $ 5,401
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 8,444 $ 6,868
Retained earnings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 620 $ 650
Accumulated other comprehensive loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ (2,383) $ (2,724)
Total stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 6,473 $ 4,675
Total liabilities and stockholders’ equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $11,380 $10,503
Selected Unconsolidated Operations Data:
For the Year Ended

December 31,
2010 2009 2008
(in millions)
Equity in earnings of subsidiaries and affiliates . . . . . . . . . . . . . . . . . . . . . . $ 590 $983 $2,019
Income before income taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 181 $450 $1,448
Income tax benefit (expense) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(172) $208 $ (214)
Net income attributable to The AES Corporation . . . . . . . . . . . . . . . . . . . . $ 9 $658 $1,234
S-5
2. Notes Payable
December 31,
Interest Rate Maturity 2010 2009
(in millions)
Senior Unsecured Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9.375% 2010 $ — $ 214
Senior Secured Term Loan . . . . . . . . . . . . . . . . . . . . . . . . . . . . LIBOR + 1.75% 2011 200 200
Senior Unsecured Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.875% 2011 129 129
Second Priority Senior Secured Note . . . . . . . . . . . . . . . . . . . . 8.75% 2013 — 690
Senior Unsecured Note . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.00% 2017 1,500 1,500
Term Convertible Trust Securities . . . . . . . . . . . . . . . . . . . . . . 6.75% 2029 517 517
Unamortized discounts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (28) (34)
SUBTOTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,612 $5,515
Less: Current maturities . . . . . . . . . . . . . . . . . . . . . . . . . . (463) (214)
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,149 $5,301
FUTURE MATURITIES OF DEBT—Recourse debt as of December 31, 2010 is scheduled to reach

maturity as set forth in the table below:
Annual
December 31, Maturities
(in millions)
2011 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 463
2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
2013 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . —
2014 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 497
2015 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500
Thereafter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,152
Total debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $4,612
3. Dividends from Subsidiaries and Affiliates

Cash dividends received from consolidated subsidiaries and from affiliates accounted for by the equity
method were as follows:
2010 2009 2008

(in millions)
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $944 $948 $738
Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 10 $ 60 $ 61
S-6
4. Guarantees and Letters of Credit
GUARANTEES—In connection with certain of its project financing, acquisition, and power purchase
agreements, the Company has expressly undertaken limited obligations and commitments, most of which will
only be effective or will be terminated upon the occurrence of future events. These obligations and commitments,
excluding those collateralized by letter of credit and other obligations discussed below, were limited as of
December 31, 2010, by the terms of the agreements, to an aggregate of approximately $415 million representing
24 agreements with individual exposures ranging from less than $1 million up to $62 million.
LETTERS OF CREDIT—At December 31, 2010, the Company had $85 million in letters of credit
outstanding representing 30 agreements with individual exposures ranging from less than $1 million up to
$26 million, which operate to guarantee performance relating to certain project development and construction
activities and subsidiary operations. During 2010, the Company paid letter of credit fees ranging from 3.19% to
3.75% per annum on the outstanding amounts.
S-7
THE AES CORPORATION
SCHEDULE II
VALUATION AND QUALIFYING ACCOUNTS
(IN MILLIONS)
Balance at Charged to Balance at

Beginning of Cost Amounts Translation the End of
the Period and Expense Written off Adjustment the Period
Allowance for accounts receivables

(current and noncurrent)
Year ended December 31, 2008 . . . . . . . . . . . . . . . $257 $128 $ (56) $(74) $255
Year ended December 31, 2009 . . . . . . . . . . . . . . . 255 106 (109) 41 293
Year ended December 31, 2010 . . . . . . . . . . . . . . . 293 53 (41) 3 308
S-8
Exhibit 10.13
PERFORMANCE STOCK UNIT AWARD AGREEMENT

PURSUANT TO
THE AES CORPORATION 2003 LONG TERM COMPENSATION PLAN
The AES Corporation, a Delaware corporation (the “Company”), grants to the Employee named below, pursuant to The AES
Corporation 2003 Long Term Compensation Plan, as amended (the “Plan”) and this Performance Stock Unit Award Agreement
(this “Agreement”), this Award of Performance Stock Units (“PSUs”) upon the terms and conditions set forth herein. Capitalized
terms not otherwise defined herein will each have the meaning assigned to them in the Plan.
1. This Award of PSUs is subject to all terms and conditions of this Agreement and the Plan, the terms of which are incorporated
herein by reference:
Name of Employee:
Fidelity System ID:
Grant Date:
Grant Price:
Total Number of PSUs Granted:
2. Each PSU represents a right to receive one Share on the Payment Date (as defined below) in accordance with the terms of this
Agreement; provided, however, that in lieu of delivery of a Share on the Payment Date, the Committee may, in its discretion,
cause the Company to deliver cash having a Fair Market Value equivalent to a Share. Any payment due to the Employee under
this Agreement shall be made promptly following the date vested PSUs become earned and payable under paragraph 4(a),
paragraph 5 or paragraph 6 of this Agreement, as applicable (the “Payment Date”), but in no event later than March 15th of the
calendar year following the calendar year containing the Payment Date.
3. A PSU (i) does not represent an equity interest in the Company, (ii) carries no voting, dividend or dividend equivalent rights and
(iii) the holder will not have an equity interest in the Company or any of such shareholder rights, unless the vesting and
performance conditions of the PSU are met and the PSU is paid out with a Share rather than cash.
4. This Award of PSUs will vest, in accordance with and subject to the terms of this Agreement, in three equal installments on
February , , February , ,and February , (each a “Vesting Date”), provided, however, that if:
(a) the Employee Separates from Service prior to the end of the Performance Period by reason of the Employee’s death
or a Separation from Service on account of Disability, all PSUs that have not previously vested shall vest and the
Employee’s PSUs referenced in the chart above shall be paid to the Employee at the rate of one Share for each PSU
(or the equivalent cash value); and
(b) if the Employee Separates from Service for any other reason, including, but not limited to, voluntarily by the
Employee, on account of Retirement, by reason of a death or Disability subsequent to the end of the Performance
Period, or by reason of a Separation from Service by the Company with or without cause (other than by reason of
death or Disability as provided in paragraph 4(A)), the Employee will be eligible to receive the value of his or her
vested PSUs on the Payment Date in accordance with and subject to the terms set forth in paragraph 5 below .
1
Any PSUs that have not vested prior to the date that an Employee Separates from Service for any reason (other than by reason of
death or Disability), (i) will not subsequently vest; and (ii) will be immediately cancelled and forfeited without payment or
further obligation by the Company or any Affiliate. In addition, the Employee’s right to receive Shares and/or cash in respect of
vested PSUs that have not been forfeited will be paid on the Payment Date if, and only if, all relevant performance conditions
are met, in accordance with the terms and conditions of this Agreement and the Plan.
5. The Company will issue and deliver Shares in satisfaction of vested PSUs subject to and conditioned upon the attainment of the
performance conditions set forth below, as approved by the Committee at the time of grant; provided, however, notwithstanding
the performance level achieved, the Committee may reduce the number of PSUs earned or terminate this Award of PSUs
altogether, but in no event may the Committee increase the value of a PSU underlying this Award beyond the performance
levels achieved. For purposes of this Agreement, the “Performance Period” is the period beginning on January 1, and
ending on December 31, .
(i) Total Shareholder Return (50% weighted)
The value of fifty percent (50%) of the Employee’s vested PSUs will depend upon the performance of the Total Shareholder
Return on AES common stock (“AES-TSR”) against the Total Shareholder Return on the S&P 500 Index (“S&P 500 Index -
TSR”), in each case, as measured over the Performance Period, as set forth below:
ACTUAL AES-TSR COMPARED TO
S&P 500 INDEX-TSR FOR THE SHARES EARNED (OR CASH OF AN
PERFORMANCE PERIOD EQUIVALENT FAIR MARKET VALUE)
Below 30th Percentile None (0%)
50%
Equal to the 30 Percentile
th
(0.5 x 50% of number of vested PSUs)
100%
Equal to the 50th Percentile
Equal to or greater than 70th 150%
Percentile (1.5 x 50% of number of vested PSUs)
Equal to or greater than 90th 200%
Percentile (2.0 x 50% of number of vested PSUs)
For AES-TSR levels achieved greater than the 30th percentile and less than the 50th percentile, greater than 50th percentile
and less than 70th percentile, and greater than the 70th percentile and less than the 90th percentile, the number of Shares
eligible for vesting (or cash of an equivalent Fair Market Value) will be determined based on straight-line interpolation. The
maximum value of a PSU is 2 Shares.
Except for any PSUs forfeited prior to the end of the Performance Period pursuant to the following paragraph, all PSUs pursuant
to this Award will be forfeited and will cease to be outstanding as of the end of the Performance Period if the AES-TSR over the
Performance Period is below the 30th percentile of the S&P 500 Index-TSR.
(ii) Cash Value Added (50% weighted)
The value of the remaining fifty percent (50%) of the Employee’s vested PSUs will depend upon the Company’s actual Cash
Value Added (“CVA”) over the Performance Period as compared to the performance target, as set forth below::
SHARES EARNED (OR CASH OF
ACTUAL CVA OVER THE AN EQUIVALENT FAIR MARKET
PERFORMANCE PERIOD VALUE
Below 80% of Performance Target = None (0%)
50%
Equal to 90% of Performance Target =
100%
Equal to 100% of Performance Target =
Equal to or greater than 120% of 200%
Performance Target = (2.0 x 50% of number of vested PSUs)
2
For CVA levels achieved greater than 80% and less than 90% of performance target, greater than 90% and less than 100%
of performance target, and greater than 100% and less than 120% of performance target, the value will be determined based
on straight-line interpolation. The maximum value of a PSU is 2 Shares.
6. In the event that a Change of Control occurs prior to the end of the Performance Period, if the PSUs described herein have not
already been previously forfeited or cancelled, such PSUs will become fully vested and the Payment Date will occur
contemporaneous with the completion of the Change of Control; provided, however, that in connection with a Change in Control
and certain other events, payment of any obligation payable pursuant to the preceding sentence may be made in cash of
equivalent value and/or securities or other property in the Committee’s discretion.
7. It is intended that under current U.S. federal income tax laws, the Employee will not be subject to income tax unless and until
Shares and/or cash are delivered to the Employee on the Payment Date, at which time the Fair Market Value of the Shares
and/or cash will be reportable as ordinary income, and subject to income tax withholding as well as social security and Medicare
(FICA) taxes. The Company and its subsidiaries and affiliates have the right (i) to withhold any tax required to be withheld in
connection with this Award of PSUs from Shares and/or cash otherwise deliverable or from any other payment to be made to the
Employee, or (ii) to otherwise condition the Employee’s right to receive or retain the Shares and/or cash on the Employee
making arrangements satisfactory to the Company or any of its subsidiaries or affiliates to enable any related tax obligation of
the Employee to be satisfied. The Employee should consult his or her personal advisor to determine the effect of this Award of
PSUs on his or her own tax situation.
8. Notices hereunder and under the Plan, if to the Company, will be delivered to the Plan Administrator (as so designated by the
Company) or mailed to the Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203, attention of the Plan
Administrator, or, if to the Employee, will be delivered to the Employee or mailed to his or her address as the same appears on
the records of the Company.
9. All decisions and interpretations made by the Board of Directors or the Committee with regard to any question arising hereunder
or under the Plan will be binding and conclusive on all persons. Unless otherwise specifically provided herein, in the event of
any inconsistency between the terms of this Agreement and the Plan, the Plan will govern.
10. By accepting this Award of PSUs, the Employee acknowledges receipt of a copy of the Plan and the prospectus relating to this
Award of PSUs, and agrees to be bound by the terms and conditions set forth in this Agreement and the Plan, as in effect and/or
amended from time to time.
11. This Award is intended to be excepted from coverage under Section 409A of the Code and shall be administered, interpreted and
construed accordingly. The Employee shall have no right to designate the date of any payment under this Agreement. Each
payment under this Agreement is intended to be excepted under the short-term deferral exception as specified in Treas. Reg. §
1.409A-1(b)(4). The Company may, in its sole discretion and without the Employee’s consent, modify or amend the terms and
conditions of this Award, impose conditions on the timing and effectiveness of the issuance of the Shares, or take any other
action it deems necessary or advisable, to cause this Award to comply with Section 409A of the Code (or an exception thereto).
3
Notwithstanding, the Employee recognizes and acknowledges that Section 409A of the Code may impose upon the Employee
certain taxes or interest charges for which the Employee is and shall remain solely responsible.
12. This Agreement will be governed by the laws of the State of Delaware without giving effect to its choice of law provisions.
The AES CORPORATION
By:
Name: Rita Trehan
Title: Vice President, Human Resources
4
Exhibit 10.14
RESTRICTED STOCK UNIT AWARD AGREEMENT

PURSUANT TO
The AES Corporation, a Delaware corporation (the “Company”), grants to the Employee named below, pursuant to The AES
Corporation 2003 Long Term Compensation Plan, as amended (the “Plan”) and this Restricted Stock Unit Award Agreement
(this “Agreement”), this Award of Restricted Stock Units (“RSUs”) upon the terms and conditions set forth herein. Capitalized terms
not otherwise defined herein will each have the meaning assigned to them in the Plan.
1. This Award of RSUs is subject to all terms and conditions of this Agreement and the Plan, the terms of which are incorporated
herein by reference:
Name of Employee:
Fidelity System ID:
Grant Date:
Grant Price:
Total Number of RSUs Granted:

2. Each RSU represents a right to receive one Share on the appropriate Vesting Date (as defined below) in accordance with the
terms of this Agreement; provided, however, that in lieu of delivery of a Share, the Committee may, in its discretion, cause the
Company to deliver cash having a Fair Market Value equivalent to a Share. Any payment due to the Employee under this
Agreement shall be made promptly following the date the RSUs vest under paragraph 4 or 5 of this Agreement, but in no event
later than March 15th of the calendar year following the calendar year in which the RSUs vest.
3. An RSU (i) does not represent an equity interest in the Company, (ii) carries no voting, dividend or dividend equivalent rights,
and (iii) the holder will not have an equity interest in the Company or any of such shareholder rights, unless the vesting
conditions of the RSU are met and the RSU is paid out with a Share rather than cash.
4. This Award of RSUs will vest, in accordance with and subject to the terms of this Agreement, in three equal installments on
February , , February , , and February , , (each a “Vesting Date”) provided, however, that if:
(A) the Employee Separates from Service prior to the applicable Vesting Date by reason of the Employee’s death or a
Separation from Service on account of Disability, all RSUs that have not previously vested shall vest and be paid to the
Employee; and
(B) if the Employee Separates from Service prior to the applicable Vesting Date for any reason, including, but not limited to,
voluntarily by the Employee, on account of Retirement, or by reason of a Separation from Service by the Company with or
without cause (other than by reason of death or Disability), all RSUs that have not previously vested shall be immediately
cancelled and forfeited without payment or further obligation by the Company or any Affiliate.
5. In the event that a Change of Control occurs prior to the applicable Vesting Date, if the RSUs described herein have not already
been previously forfeited or cancelled, such RSUs will become fully vested contemporaneous with the completion of the Change
of Control; provided, however, that in connection with a Change in Control and certain other events, payment of any obligation
payable pursuant to the preceding sentence may be made in cash of equivalent value and/or securities or other property in the
Committee’s discretion.
1
6. It is intended that under current U.S. federal income tax laws, the Employee will not be subject to income tax unless and until
Shares and/or cash are delivered to the Employee on the Vesting Date, at which time the Fair Market Value of the Shares and/or
cash will be reportable as ordinary income, and subject to income tax withholding as well as social security and Medicare
(FICA) taxes. The Company and its subsidiaries and affiliates have the right (i) to withhold any tax required to be withheld in
connection with this Award of RSUs from Shares and/or cash otherwise deliverable to the Employee or from any other payment
to be made to the Employee, or (ii) to otherwise condition the Employee’s right to receive or retain the Shares and/or cash on the
Employee making arrangements satisfactory to the Company or any of its subsidiaries or affiliates to enable any related tax
obligation of the Employee to be satisfied. The Employee should consult his or her personal advisor to determine the effect of
this Award of RSUs on his or her own tax situation.
7. Notices hereunder and under the Plan, if to the Company, will be delivered to the Plan Administrator (as so designated by the
Company) or mailed to the Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203, attention of the Plan
Administrator, or, if to the Employee, will be delivered to the Employee or mailed to his or her address as the same appears on
the records of the Company.
or under the Plan will be binding and conclusive on all persons. Unless otherwise specifically provided herein, in the event of
any inconsistency between the terms of this Agreement and the Plan, the Plan will govern.
9. By accepting this Award of RSUs, the Employee acknowledges receipt of a copy of the Plan and the prospectus relating to this
Award of RSUs, and agrees to be bound by the terms and conditions set forth in this Agreement and the Plan, as in effect and/or
amended from time to time.
10. This Award is intended to be excepted from coverage under Section 409A of the Code and shall be administered, interpreted and
construed accordingly. The Employee shall have no right to designate the date of any payment under this Agreement. Each
payment under this Agreement is intended to be excepted under the short-term deferral exception as specified in Treas. Reg. §
1.409A-1(b)(4) The Company may, in its sole discretion and without the Employee’s consent, modify or amend the terms and
conditions of this Award, impose conditions on the timing and effectiveness of the issuance of the Shares, or take any other
action it deems necessary or advisable, to cause this Award to comply with Section 409A of the Code (or an exception thereto).
Notwithstanding, the Employee recognizes and acknowledges that Section 409A of the Code may impose upon the Employee
certain taxes or interest charges for which the Employee is and shall remain solely responsible.
2
The AES CORPORATION
By:
Name: Rita Trehan
3
Exhibit 10.15
PERFORMANCE UNIT AWARD AGREEMENT

PURSUANT TO
The AES Corporation, a Delaware Corporation (the “Company”), grants to the Employee named below, pursuant to The AES
Corporation 2003 Long-Term Compensation Plan, as amended (the “Plan”) and this Performance Unit Award Agreement (this
“Agreement”), this Award of Performance Units (“Performance Units”), the value of which is related to and contingent upon the
achievement of a predetermined Performance Target (as set forth herein). Capitalized terms not otherwise defined herein shall each
have the meaning assigned to them in the Plan.
1. This Award of Performance Units is subject to all terms and conditions of this Agreement and the Plan, the terms of which are
incorporated herein by reference:
Name of Employee:
Fidelity System ID:
Grant Date:
Total Number of Performance Units:
Target Value:
Notwithstanding any provision of the Plan to the contrary, this Award of Performance Units is subject to the terms and
conditions of this Agreement and the Plan regardless of whether the Employee is a Covered Person, as defined in the Plan.
2. The Employee is hereby granted an Award of the total number of Performance Units set forth above. The Performance Units
will be reflected in a book account by the Company during the Performance Period (as defined below). Contingent upon
achieving or exceeding 80% or more of the Performance Target, the value of vested Performance Units, will be paid in cash in
calendar year (the “Payment Date”), as soon as administratively practicable following the end of the Performance
Period.
3. The “Performance Period” is the period beginning on January 1, and ending on December 31, .
4. This Award of Performance Units will vest, in accordance with and subject to the terms of this Agreement, in three equal
installments on each of December , , December , , and December , (each a “Vesting Date”); provided,
however, that if:
(A) the Employee Separates from Service prior to the end of the Performance Period by reason of the Employee’s death or a
Separation from Service on account of Disability, all Performance Units referenced in the chart above shall vest on such
termination date and a cash amount equal to $1 for each Performance Unit shall be paid to the Employee on the date of
Separation from Service; provided, however, any payment due to the Employee by reason of a Separation from Service on
account of Disability shall be delayed to the extent required by Section 14(k)(i) of the Plan;
(B) the Employee Separates from Service prior to the Payment Date by reason of a Separation from Service by the Company
for cause (as determined by the Committee in its sole discretion), this Award of Performance Units (including any vested
portion) will be forfeited in full and cancelled by the Company, and shall cease to be outstanding, upon such termination
date; and
(C) the Employee Separates from Service for any other reason, including voluntarily by the Employee, on account of
Retirement, by reason of death or Disability subsequent to the end of the Performance Period, or by reason of a Separation
from Service by the Company (other than for cause or by reason of death or Disability as provided in paragraphs 4(A) and
4(B)), the Employee will be eligible to receive the value of his or her vested Performance Units on the Payment Date in
accordance with and subject to the terms set forth in paragraph 5 below.
Any Performance Units that have not vested on or before the date that an Employee Separates from Service for any reason (other
than by reason of death or Disability), (i) will not subsequently vest; and (ii) will be immediately cancelled and forfeited without
payment or further obligation by the Company or any Affiliate. In addition, the Employee’s right to receive the applicable
Performance Unit value in respect of vested Performance Units that have not been forfeited will be paid on the Payment Date, if,
and only if, all relevant performance conditions are met, in accordance with the terms and conditions of this Agreement and the
Plan.
5. Each Performance Unit represents a right to receive the applicable Performance Unit value in the chart below, in cash on the
Payment Date, if and only if, such Performance Unit (i) has not been forfeited prior to its Vesting Date and (ii) has vested in
accordance with the terms of this Agreement.
The value of each Performance Unit will depend upon the Company’s actual Cash Value Added (“CVA”), as defined below,
over the Performance Period as compared to the performance target set forth and approved by the Compensation Committee of
the Board of Directors of the Company (the “Committee”) at the time of grant, as follows:
PERFORMANCE
ACTUAL CVA OVER THE PERFORMANCE PERIOD UNIT VALUE
Below 80% of Performance Target = USD$0.00

Equal to 90% of Performance Target = USD$0.50
Equal to 100% of Performance Target = USD$1.00
Equal to or greater than 120% of Performance Target = USD$2.00
For CVA levels achieved greater than 80% and less than 90% of performance target, greater than 90% and less than 100%
of performance target, and greater than 100% and less than 120% of performance target, the Performance Unit value will be
determined based on straight-line interpolation. The maximum value of a Performance Unit is $2.00.
Notwithstanding the performance level achieved, the Committee may reduce or terminate the Performance Award altogether,
but in no event may the Committee increase the value of a Performance Unit underlying this Award of Performance Units
beyond the performance levels achieved.
6. In addition, in the event that a Change of Control occurs prior to the end of the Performance Period, if the Performance Units
described herein have not already been previously forfeited or cancelled, such Performance Units shall become fully vested and
payable in a cash amount equal to $1.00 for each Performance Unit. Payment of any amount payable pursuant to the preceding
sentence may be made in cash and/or securities or other property, in the Committee’s discretion, and will be made
contemporaneous with the completion the Change of Control.
7. Notices hereunder and under the Plan, if to the Company, shall be delivered to the Plan Administrator (as so designated by the
Company) or mailed to the Company’s principal office, 4300 Wilson Boulevard, Arlington, VA 22203 (or as subsequently
designated by the Company), attention of the Plan Administrator, or, if to the Employee, shall be delivered to the Employee or
mailed to his or her address as the same appears on the records of the Company.
or under the Plan shall be binding and conclusive on all persons. Unless otherwise specifically provided herein, in the event of
any inconsistency between the terms of the Plan and this Agreement, the terms of the Plan will govern.
9. By accepting this Award of Performance Units, the Employee acknowledges receipt of a copy of the Plan and the prospectus
relating to this Award of Performance Units, and agrees to be bound by the terms and conditions set forth in the Plan and this
Agreement, as in effect and/or amended from time to time.
10. This Award is intended to satisfy the requirements of Section 409A of the Code (or an exception thereto) and shall be
administered, interpreted and construed accordingly. A payment shall be treated as made on the specified date of payment if
such payment is made at such date or a later date in the same calendar year or, if later, by the 15th day of the third calendar
month following the specified date of payment, as provided and in accordance with Treas. Reg. § 1.409A-3(d). The Company
may, in its sole discretion and without the Employee’s consent, modify or amend the terms and conditions of this Award, impose
conditions on the timings and effectiveness of the payment of the Performance Units, or take any other action it deems necessary
or advisable, to cause this Award to comply with Section 409A of the Code (or an exception thereto). Notwithstanding, the
Employee recognizes and acknowledges that Section 409A of the Code may impose upon the Employee certain taxes or interest
charges for which the Employee is and shall remain solely responsible.
The AES CORPORATION
By:
Name: Rita Trehan
Exhibit 10.18
THE AES CORPORATION
SEVERANCE PLAN
(As Amended and Restated December 31, 2010)
ARTICLE I
GENERAL PROVISIONS
1.1 Establishment and Purpose.

The purpose of the AES Corporation Severance Plan, as amended (the “Plan”) is to provide eligible employees who are
involuntarily terminated from employment in certain limited circumstances with severance and welfare benefits as set forth in this
Plan. Benefits payable under this Plan are not, and should not be construed as vested benefits, and are generally intended for
employees who are involuntarily terminated without cause. This Plan constitutes a welfare plan under ERISA and will be interpreted
in accordance with the terms of ERISA. This Plan supersedes any prior severance plans, policies, guidelines, arrangements,
agreements, letters and/or other communication, whether formal or informal, written or oral sponsored by the Employer and/or
entered into by any representative of the Employer. The Plan was originally established June 1, 2006,
1.2 Definitions.
Except as may otherwise be specified or as the context may otherwise require, for purposes of the Plan, the following terms
shall have the respective meaning ascribed thereto.
“Administrator” means the Health and Welfare Benefits Plan LLC or such other committee or persons designated by it to
assume the duties of the Administrator.
“Affiliated Employer” mean any corporation which is a member of a controlled group of corporations (as defined in
Section 414(b) of the Code) which includes the Company; any trade or business (whether or not incorporated) which is under
common control (as defined in Section 414(c) of the Code) with the Company; any organization (whether or not incorporated) which
is a member of an affiliated service group (as defined in Section 414(m) of the Code) which includes the Company; and any other
entity required to be aggregated with the Company pursuant to regulations under Section 414(o) of the Code.
“Annual Compensation” means (i) an Eligible Employee’s annualized base salary as in effect as of the Eligible Employee’s
Termination Date or (ii) in the event that an Eligible Employee is an hourly employee, the person’s cumulative base earnings
(excluding bonuses) for the previous completed calendar year prior to the Eligible Employee’s Terminate Date. Unless otherwise
provided on a Benefits Schedule, Annual Compensation shall: (i) include pre-tax employee contributions under any qualified defined
contribution retirement plan, salary deferrals under any unfunded nonqualified deferred compensation plan, and amounts deferred (to
include employee premiums) under a flexible spending account established pursuant to section 125 of the Code; and (ii) exclude any
amounts contributed by the Employer to any plan established pursuant to section 125 of the Code, overtime pay, bonuses, shift
differential, annual incentive payments, long-term incentive awards (including but not limited to stock options, restricted stock and
performance unit awards), and any other form of supplemental compensation.
-1-
“Benefit Schedule” means any schedule attached to the Plan which sets forth the benefits of specified groups of Eligible
Employees, as approved by the Company and updated by the Administrator from time to time.
“Board” means the Board of Directors of the Company.

“Bonus” means an Eligible Employee’s annual target bonus compensation as established by the Employer and in effect on
the Eligible Employee’s Termination Date.
“Cause” means Separation from Service by action of the Employer, or resignation in lieu of such Separation from Service,
on account of the Eligible Employee’s dishonesty; insubordination; continued and repeated failure to perform the Eligible Employee’s
assigned duties or willful misconduct in the performance of such duties; intentionally engaging in unsatisfactory job performance;
failing to make a good faith effort to bring unsatisfactory job performance to an acceptable level; violation of the Employer’s policies,
procedures, work rules or recognized standards of behavior; misconduct related to the Eligible Employee’s employment; or a charge,
indictment or conviction of, or a plea of guilty or nolo contendere to, a felony, whether or not in connection with the performance by
the Eligible Employee of his or her duties or obligations to the Employer.
“Change in Control” means the occurrence of one or more of the following events: (i) any sale, lease, exchange or other
transfer (in one transaction or a series of related transactions) of all, or substantially all, of the assets of the Company to any Person or
group (as that term is used in Section 13(d) (3) of the Securities Exchange Act of 1934) of Persons, (ii) a Person or group (as so
defined) of Persons (other than management of the Company on the date of the adoption of this Plan or their Affiliates) shall have
become the beneficial owner of more than 35% of the outstanding voting stock of the Company, or (iii) during any one-year period,
individuals who at the beginning of such period constitute the Board of Directors (together with any new director whose election or
nomination was approved by a majority of the directors then in office who were either directors at the beginning of such period or
who were previously so approved, but excluding under all circumstances any such new director whose initial assumption of office
occurs as a result of an actual or threatened election contest or other actual or threatened solicitation of proxies or consents by or on
behalf of any individual, corporation, partnership or other entity or group) cease to constitute a majority of the Board of Directors. For
purposes of this definition, “Affiliate” means: (i) any Subsidiary of the Company; (ii) any entity or Person or group of Persons that,
directly or through one or more intermediaries, is controlled by the Company; and (iii) any entity or Person or group of Persons in
which the Company has a significant equity interest, as determined by the Company.
“COBRA Coverage” means medical, dental and vision coverage which is required to be offered to terminated employees
under section 4980B of the Code and section 606 of ERISA; provided, however, that no provision of this Plan shall be construed to
require the Employer to contribute on behalf of an Eligible Employee towards continuation coverage for a health spending account.
“Code” means the Internal Revenue Code of 1986, as amended.

-2-
“Company” (or “AES”) means The AES Corporation, a Delaware corporation.
“Disability Termination” means a Separation from Service: (a) on account of the Eligible Employee’s failure to return to
full-time employment following exhaustion of short-term disability benefits provided by the Employer; (b) following the date the
Eligible Employee is determined to be eligible for: (i) long-term disability benefits under any long-term disability insurance policy or
plan maintained by the Employer; or (ii) disability pension or retirement benefits under any qualified retirement plan maintained by
the Employer; or (c) due to a physical or mental condition that substantially restricts the Eligible Employee’s ability to perform his or
her usual duties, as determined by the Employer.
“Eligible Employee” means any Employee of the Employer who: (i) is not an Ineligible Employee (within the meaning of
Section 2.2); and (ii) who has completed one Year-of-Service as a full-time Employee.
“Employee” means any person who is listed as an employee on the payroll records of the Employer as a full-time
employee. Any person hired by the Employer as a consultant or independent contractor and any other individual whom the Employer
does not treat as its employee for federal income tax purposes shall not be an Employee for purposes of this Plan, even if it is
subsequently determined by a Court or administrative agency that such individual should be, or should have been, properly classified
as a common law employee of the Employer.
“Employer” means the Company and any Affiliated Employer that participates in the Plan with the consent of the
Company. The Administrator shall maintain a list of participating Employers.
“ERISA” means the Employee Retirement Income Security Act of 1974, as amended.
“Ineligible Termination” means an Eligible Employee’s Separation from Service on account of:
• The Eligible Employee’s voluntary resignation, including but not limited to the Eligible Employee’s unilateral
Separation from Service at any time prior to the Termination Date established by the Employer;
• Any Separation from Service that the Employer determines (either before or after the Separation from Service and
whether or not any notice is given to the employee) the payment of benefits under the Plan in connection with such
Separation from Service would be inconsistent with the intent and purpose of the Plan;
• A Separation from Service in connection with an Eligible Employee’s failure to return to work immediately
following the conclusion of an approved leave-of-absence.
-3-
• A Separation from Service for, or on account of, Cause;
• A Disability Termination;
• The Eligible Employee’s death;
• The Eligible Employee declines to accept a New Job Position offered by the Employer that is located within 50
miles of the Eligible Employee’s then assigned work site of the Employer;
• The Sale of Business Rule set forth in Section 2.4 herein; or
• The voluntary transfer of employment from Eligible Employee’s Employer to another AES related entity,
irrespective whether the Eligible Employee is required to relocate or whether the AES related entity qualifies as an
Affiliated Employer.
“Involuntary Termination” means an Eligible Employee’s involuntary Separation from Service that is (i) not an Ineligible
Termination and (ii) by action of the Employer on account of:
• Permanent Layoff;
• Reduction-in-force;
• Permanent job elimination;
• The restructuring or reorganization of a business unit, division, department or other segment;
• Termination by Mutual Consent; or
• Eligible Employee declines to accept a New Job Position offered by the Employer that requires the Eligible
Employee to relocate to a work site location that is located greater than 50 miles from the Employee’s then assigned
work site of the Employer; provided, however, that except as provided in Section 2.4 or in connection with a
Separation from Service following a Change in Control, an Eligible Employee who functions at or above a Group
Manager position (or its equivalent) shall not incur an Involuntary Termination if such Eligible Employee declines a
New Job Position (regardless of its location) at a time when the Eligible Employee’s existing job position is being
eliminated.
“Layoff” means a special program of workforce reduction approved in advance in writing by the Employer and that is
designated as a “Layoff” for purposes of this Plan. Notwithstanding the foregoing, a Layoff must result in a permanent elimination of
a job resulting from an internal reorganization of the Employer.
-4-
“New Job Position” means: (i) with respect to an Eligible Employee who has demonstrated inadequate or unsatisfactory
performance, as determined by the Employer, any job position offered by the Employer; or (ii) with respect to all other Eligible
Employees, a full-time job position offered by the Employer that does not result in a reduction of the Employee’s Annual
Compensation.
“Participant” has the meaning set forth in Section 2.1.
“Person” means any individual, corporation, joint venture, association, joint stock company, trust, unincorporated
organization or government or any agency or political subdivision thereof.
“Section 409A” shall mean Section 409A of the Code, the regulations and other binding guidance promulgated thereunder.
“Separation From Service” shall mean an Eligible Employee’s termination of employment with the Company and all of its
controlled group members within the meaning of Section 409A of the Code. For purposes hereof, the determination of controlled
group members shall be made pursuant to the provisions of Section 414(b) and 414(c) of the Code; provided that the language “at
least 50 percent” shall be used instead of “at least 80 percent” in each place it appears in Section 1563(a)(1),(2) and (3) of the Code
and Treas. Reg. § 1.414(c)-2; provided, further, where legitimate business reasons exist (within the meaning of Treas. Reg. § 1.409A-
1(h)(3)), the language “at least 20 percent” shall be used instead of “at least 80 percent” in each place it appears. Whether an
Employee has a Separation from Service will be determined based on all of the facts and circumstances and in accordance with the
guidance issued under Section 409A.
“Specified Employee” means a key employee (as defined in Section 416(i) of the Code without regard to paragraph
(5) thereof) of the Company as determined in accordance with the regulations issued under Code Section 409A and the procedures
established by the Company.
“Subsidiary” means any entity in which the Company owns or otherwise controls, directly or indirectly, stock or other
ownership interests having the voting power to elect a majority of the board of directors, or other governing group having functions
similar to a board of directors, as determined by the Company.
“Termination by Mutual Consent” means an involuntary Separation from Service pursuant to which the Company agrees,
in its sole discretion, that benefits are payable under this Plan.
“Termination Date” means the date of the Eligible Employee’s Separation of Service (or scheduled date of Separation from
Service, as applicable).
“Week’s Compensation” means one fifty-second ( 1/52) of an Eligible Employee’s Annual Compensation.
-5-
“Year-of-Service” means each twelve-month period measured from the Eligible Employee’s first day of employment with
an Employer, as reduced to reflect breaks in service and/or services performed during such period the Eligible Employee was
otherwise ineligible to participate in the Plan, as determined under the rules promulgated by the Administrator. Service with a
predecessor employer (that was not an Affiliated Employer) shall be recognized to the extent such service is recognized under The
AES Corporation Retirement Savings Plan. Service shall also include services performed prior to the effective date of the Plan. In the
event an Eligible Employee’s Separation from Service and the Eligible Employee is subsequently reemployed by the Employer, the
Eligible Employee’s service for calculation of any severance benefits under Article IV of the Plan shall be based on only upon the
Eligible Employee’s service credited since the most recent date of employment with the Employer.
ARTICLE II PARTICIPATION
2.1 Eligibility.
Except as otherwise provided in this Article II or a Benefit Schedule, an Eligible Employee shall, upon execution of the
Release in the form specified in Article III of this Plan in the time and manner prescribed by the Administrator, be eligible for the
severance benefits provided under Article IV of this Plan if the Eligible Employee’s Separation from Service is by reason of an
Involuntary Termination. An Eligible Employee who fails to execute the Release in the time and manner prescribed by the
Administrator or who subsequently revokes execution of the Release in accordance with its terms shall not be entitled to receive
benefits under this Plan. An Eligible Employee who satisfies all of the terms and conditions specified in this Plan and who becomes
entitled to receive benefits hereunder shall be referred to herein as a “Participant.”
2.2 Ineligible Employees. Notwithstanding any provision of this Plan to the contrary, the following Employees (“Ineligible
Employees”) are not eligible to participate in the Plan:
• Any Employee who has been hired to work on a part-time, seasonal or temporary basis or who is classified as a part-
time, seasonal or temporary Employee, or a student intern on the Employer’s records;
• Any Employee who has been hired by the Employer to work in a job share position (provided that such Employee is
not otherwise employed on a full-time basis);
• An Employee who is member of a collective bargaining unit to which this Plan has not been specifically extended
by a collective bargaining agreement;
• An Employee entitled to a severance type payment pursuant to any other plan, policy, arrangement, agreement, letter
or other communication sponsored by, or entered into with, or maintained by the Employer, including but not
limited to an employment agreement;
-6-
• Leased employees, including those within the meaning of section 414(n) of the Code;
• Nonresident aliens (other than those nonresident aliens to whom the Employer has extended participation in the Plan
with the written consent of the Company);
• Any individual who has agreed in writing that he or she waives his or her eligibility to receive benefits under the
Plan; and
• Any Employee who has an enforceable right to resume employment or to be recalled to employment with the
Employer.
2.3 Transfer of Employment.

If an Eligible Employee transfers to a location of AES to which this Plan has not been extended, such Employee shall cease
to be eligible to participate in this Plan unless the Eligible Employee’s prior Employer has agreed in writing to continue to extend
participation in the Plan to the Employee with the consent of the Company.
2.4 Sale of Business Rule.
An Eligible Employee shall not be eligible to benefits under the Plan if the Eligible Employee’s Separation from Service is
in connection with the sale of the stock or other ownership interests of the Employer or other related entity, or the sale, lease, or other
transfer of the assets, products, services or operations of the Employer or other related entity to another organization if either of the
following occurs:
• The Eligible Employee is employed by the new organization immediately following the sale, transfer or lease or is
so employed within a time period specified in an agreement between the Employer and the new organizations; or
• The Employer terminates the employment of an Eligible Employee who did not accept an offer of employment from
the new organization when the new organization offered a compensation and benefits package that was, in the
aggregate, generally comparable to the compensation and benefits provided by the Employer; provided that such
Eligible Employee was not required to relocate to a work site location that is located greater than 50 miles from the
Employee’s then assigned work site of the Employer.
Notwithstanding the foregoing, this section 2.4 shall not apply if an Eligible Employee’s Separation from Service occurs in
connection with a Change of Control and, as such, any such Separation from Service will not be an Ineligible Termination solely on
the basis of the Sale of Business Rule.
-7-
ARTICLE III
RELEASES
3.1 Release.
Notwithstanding anything in this Plan to the contrary, no benefits of any sort or nature (other than as provided in section
3.3) shall be due or paid under this Plan to any Eligible Employee unless the Eligible Employee executes a written release and
covenant not to sue, in form and substance satisfactory to the Employer, in its sole discretion, within the time stated in the release;
provided, however, that in all cases such release must become final, binding and irrevocable within sixty (60) days following the
Eligible Employee’s Termination Date. The written release shall waive any and all claims against the Employer and all related parties
including, but not limited to, claims arising out of the Eligible Employee’s employment by the Employer, the Eligible Employee’s
Separation from Service and claims relating to the benefits paid under this Plan. At the sole discretion of the Employer, the release
shall also include such noncompetition, nonsolicitation and nondisclosure provisions as the Employer considers necessary or
appropriate.
3.2 Revocation.
The release described in Section 3.1 must be executed and binding on the Eligible Employee within the timeframe
specified by the Company before benefits are due or paid. An Eligible Employee who revokes execution of the release in accordance
with the terms of the release shall not be entitled to receive benefits under the Plan.
3.3 Outplacement Services.

Notwithstanding the foregoing provisions of this Article III, the Outplacement Services set forth under Section 4.3 herein
may or may not be provided, at the discretion of the Employer, to an Eligible Employee prior to the execution of a release under this
Plan.
ARTICLE IV
SEVERANCE BENEFITS
4.1 Separation Payment.
4.1.1 A Participant shall be entitled to receive a separation payment as set forth on the applicable Benefit Schedule. The
separation payment will be paid at least monthly in substantially equal installments as salary continuation in accordance with the
Employer’s established payroll policies and practices over the same time period upon which the separation payment is based.
4.1.2 The separation payments will commence on the Employer’s next normal pay date occurring after the date the Eligible
Employee’s release becomes final, binding and irrevocable.
-8-
4.1.3 For purposes of Section 409A: (i) the right to salary continuation installment payments shall be treated as the right to
a series of separate payments; and (ii) a payment shall be treated as made on the scheduled payment date if such payment is made at
such date or a later date in the same calendar year or, if later, by the 15th day of the third calendar month following the scheduled
payment date. A Participant shall have no right to designate the date of any payment under the Plan. For purposes of the Plan, each
salary continuation installment payment is intended to be excepted from Section 409A to the maximum extent provided under
Section 409A as follows: (i) each salary continuation installment payment that is scheduled to be made on or before March 15th of the
calendar year following the calendar year containing the Termination Date is intended to be excepted under the short-term deferral
exception as specified in Treas. Reg. § 1.409A-1(b)(4); and (ii) each salary continuation installment payment that is not otherwise
excepted under the short-term deferral exception is intended to be excepted under the involuntary pay exception as specified in Treas.
Reg. § 1.409A-1(b)(9)(iii).
4.2 Continuation of Certain Welfare Benefits.

4.2.1 Medical/Dental/Vision. For the period set forth below in Section 4.2.3 and beginning in the calendar month following
the calendar month in which the Termination Date occurs, the Participant shall be eligible to participate in the Employer’s medical,
dental and vision employee welfare benefit plans applicable to the Participant on his Termination Date. To receive such benefits, the
Participant must properly enroll in COBRA coverage, and must also pay such premiums and other costs for such coverage as
generally applicable to the Employer’s active employees. The Employer will continue to pay its share of the applicable premiums
under the medical, dental and vision plans for the same level and type of coverage in which the Participant is enrolled as of the
Termination Date.
If a Participant has elected the “no benefit coverage” option under the medical, dental or vision plans as of his actual
Termination Date, the Participant shall not be entitled to continuation coverage or cash in lieu thereof. Following expiration of
coverage under this Section 4.2.1, a Participant may, to the extent eligible, continue to participate in such plans for the remainder of
the COBRA continuation period, if any.
4.2.2 Concurrent COBRA Period. The continuation period for medical, dental and vision coverage under this Plan shall be
deemed to run concurrent with the continuation period federally mandated by COBRA (generally 18 months), or any other legally
mandated and applicable federal, state, or local coverage period for benefits provided to terminated employees under the health care
plan. The continuation period will be deemed to commence on the first day of the calendar month following the month in which the
Termination Date falls. Notwithstanding the foregoing, COBRA Coverage will only be available if the Participant is eligible for and
timely elects COBRA Coverage, and timely remits payment of the premiums for COBRA Coverage.
4.2.3 Length of Benefits. Benefits under this Section 4.2 shall be for the same time period upon which the separation
payment was based; provided, however that in no event will the time period exceed 18 months. Post-termination medical benefits are
intended to be excepted from Section 409A under the medical benefits exceptions as specified in Treas. Reg. § 1.409A-1(b)(9)(v)(B).
-9-
4.3 Outplacement Services.
As set forth on the applicable Benefit Schedule, a Participant shall be eligible for such outplacement services typically
provided to employees of the same job classification or level. Outplacement services may be provided by an independent agency or
by the Employer. Notwithstanding the foregoing, the availability, duration, and appropriateness of outplacement services shall be
determined by the Administrator in its sole discretion; provided, however, that outplacement expenses must be reasonable, must be
actually incurred by the Participant and may not extend beyond the December 31 of the second calendar year following the calendar
year in which the Termination Date occurred (or such shorter period as specified by the Employer). Any such reimbursement shall be
as soon as administratively feasible, but in no event later than December 31st of the third calendar year following the calendar year in
which the Termination Date occurred. Post-termination outplacement benefits are intended to be excepted from Section 409A under
the separation payment benefits exceptions as specified in Treas. Reg. § 1.409A-1(b)(9)(v)(A).
4.4 Bonus Compensation.
As set forth on the applicable Benefits Schedule and subject to any deferral election that the Participant has made with
respect to such amounts, a Participant will be eligible for (i) a prorated Bonus; and (ii) any accrued but unpaid bonus compensation
for completed performance periods. The prorated Bonus specified in Section 4.4(i) will be prorated based on the amount of time the
Participant was actively at work on a full-time basis in the calendar year in which the Participant’s Termination Date falls, and will be
paid within the applicable 2 1/2 month period specified in Treas. Reg. § 1.409A-1(b)(4). The bonus compensation specified in
Section 4.4(ii) shall be paid no later than the time that such amounts are paid to similarly situated employees in accordance with the
applicable plan terms. Notwithstanding the foregoing, with respect to bonuses paid in accordance with the terms of The AES
Corporation Performance Incentive Plan (or any successor plan, the “Performance Incentive Plan”), any such bonus compensation
shall be paid only to the extent earned in accordance with the terms of the Performance Incentive Plan and on the payment date
specified therein.
4.5 Enhanced Benefits.

To the extent provided under the Benefits Schedule, in the event the Participant was Involuntarily Terminated within two
years following a Change in Control, or in the event the Participant was Involuntarily Terminated under circumstances that constitute
a Layoff, the separation payment under Section 4.1 will be multiplied by 2.0. In addition, the length of time for which benefits under
Section 4.2 will be provided will also be multiplied by 2.0; provided, however, that this time period will never exceed 18 months as
set forth in section 4.2.3.
4.6 Delay in Payment.
Notwithstanding any provision of this Plan to the contrary, to the extent that a payment hereunder is subject to
Section 409A (and not excepted therefrom), such payment shall be delayed for a period of six months after the Termination Date (or,
if earlier, the death of the Participant) for any Participant that is a Specified Employee. Any payment that would otherwise have been
due or owing during such six-month period will be paid on the first business day of the seventh month following the date of
Termination Date.
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ARTICLE V
PLAN ADMINISTRATION
5.1 Operation of the Plan.

The Administrator shall be the named fiduciary responsible for carrying out the provisions of the Plan. The Administrator
may delegate any and all of its powers and responsibilities hereunder or appoint agents to carry out such responsibilities, and any such
delegation or appointment may be rescinded at any time. The Administrator shall establish the terms and conditions under which any
such agents serve. The Administrator shall have the full and absolute authority to employ and rely on such legal counsel, actuaries
and accountants (which may also be those of the Employer) as it may deem advisable to assist in the administration of the Plan.
5.2 Administration of the Plan.

To the extent that the Administrator in its sole discretion deems necessary or desirable, the Administrator may establish
rules for the administration of the Plan, prescribe appropriate forms, and adopt procedures for handling claims and the denial of
claims. The Administrator shall have the exclusive authority and discretion to interpret, construe, and administer the provisions of the
Plan and to decide all questions concerning the Plan and its administration. Without limiting the foregoing, the Administrator shall
have the authority to determine the level of an Employee, to determine eligibility for and the amount of any benefits due in
accordance with the attached Benefit Schedule, to make factual determinations, to correct deficiencies, and to supply omissions,
including resolving any ambiguity or uncertainty arising under or existing in the terms and provisions of the Plan or any Benefits
Schedule. Any and all such determinations of the Administrator shall be final, conclusive, and binding on the Employer, the
Employee and any and all interested parties.
5.3 Funding.
The Plan shall be unfunded and all payments hereunder and expenses incurred in connection with this Plan shall be from
the general assets of the Employer. Benefits will be paid directly by the Employer employing the Participant, and no other Employer
or Affiliated Employer will be responsible for any benefits hereunder.
5.4 Code section 409A.
Notwithstanding any provision of the Plan to the contrary, if any benefit provided under this Plan is subject to the
provisions of Section 409A of the Code and the regulations issued thereunder, the provisions of the Plan will be administered,
interpreted and construed in a manner necessary to comply with Section 409A or an exception thereto (or disregarded to the extent
such provision cannot be so administered, interpreted, or construed). With respect to payments subject to Section 409A of the Code:
(i) it is intended that distribution events
-11-
authorized under the Plan qualify as permissible distribution events for purposes of Section 409A of the Code; and (ii) the Company
and each Employer reserve the right to accelerate and/or defer any payment to the extent permitted and consistent with
Section 409A. Notwithstanding any provision of the Plan to the contrary, in no event shall the Administrator, the Company, an
Affiliated Employer or Subsidiary (or their employees, officers, directors or affiliates) have any liability to any Participant (or any
other person) due to the failure of the Plan to satisfy the requirements of Section 409A or any other applicable law.
ARTICLE VI
CLAIMS
6.1 General.
If an Employee believes that he or she is eligible for benefits under the Plan and has not been so notified, an Employee
should submit a written request for benefits to the Administrator. Any claim for benefits must be made within six months of an
Employee’s Termination Date, or the Employee will be forever barred from pursuing a claim. For purposes of this Article VI, an
Employee making a claim for benefits under the Plan shall be referred to as a “claimant”. The claimant shall file the claim with and in
the manner prescribed by the Administrator. The Administrator shall make the initial determination concerning rights to and amount
of benefits payable under this Plan.
6.2 Claim Evaluation.
A properly filed claim will be evaluated and the claimant will be notified of the approval or the denial of the claim within
ninety (90) days after the receipt of the claim, unless special circumstances require an extension of time for processing. Written notice
of the extension will be furnished to the claimant prior to the expiration of the initial ninety-day (90-day) period, and will specify the
special circumstances requiring an extension and the date by which a decision will be reached (provided the claim evaluation will be
completed within one hundred and twenty (180) days after the date the claim was filed).
6.3 Notice of Disposition.

A claimant will be given a written notice in which the claimant will be advised as to whether the claim is granted or denied,
in whole or in part. If a claim is denied, in whole or in part the notice will contain: (i) the specific reasons for the denial;
(ii) references to pertinent Plan provisions upon which the denial is based; (iii) a description of any additional material or information
necessary to perfect the claim and an explanation of why such material or information is necessary; and (iv) the claimant’s rights to
seek review of the denial.
6.4 Appeals.
If a claim is denied, in whole or in part, the claimant, or his duly authorized representative, has the right to (i) request that the
Administrator review the denial, (ii) review pertinent documents, and (iii) submit issues and comments in writing, provided that the
claimant files a written appeal with the Administrator within sixty (60) days after the date the claimant
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received written notice of the denial. Within sixty (60) days after an appeal is received, the review will be made and the claimant will
be advised in writing of the decision, unless special circumstances require an extension of time for reviewing the appeal, in which
case the claimant will be given written notice within the initial sixty-day (60-day) period specifying the reasons for the extension and
when the review will be completed (provided the review will be completed within one hundred and twenty (120) days after the date
the appeal was filed). The decision on appeal will be forwarded to the claimant in writing and will include specific reasons for the
decision and references to the Plan provisions upon which the decision is based. A decision on appeal will be final and binding on all
persons for all purposes. If a claimant’s claim for benefits is denied in whole or in part, the claimant may file suit in a state or federal
court.
Notwithstanding the aforementioned, before the claimant may file suit in a state or federal court, the claimant must exhaust the
Plan’s administrative claims procedure set forth in this Article VI. If any such state or federal judicial or administrative
proceeding is undertaken, the evidence presented will be strictly limited to the evidence timely presented to the Administrator. In
addition, any such state or federal judicial or administrative proceeding must be filed within six (6) months after the
Administrator’s final decision. Any such state or federal judicial or administrative proceeding relating to this Plan shall only be
brought in the Circuit Court for Arlington County, Virginia or in the United States District Court for the Eastern District of
Virginia, Alexandria Division. If any such action or proceeding is brought in any other location, then the filing party expressly
consents to the transfer of such action to the Circuit Court for Arlington County, Virginia or the United States District Court for
the Eastern District of Virginia, Alexandria Division. Nothing in this clause shall be deemed to prevent any party from removing
an action or proceeding to enforce or interpret this Plan from the Circuit Court for Arlington County, Virginia to the United
States District Court for the Eastern District of Virginia, Alexandria Division.
ARTICLE VII
PLAN AMENDMENTS
7.1 Amendment Authority.
The Board may, at any time and in its sole discretion, amend, modify or terminate the Plan, including any Benefit
Schedule, as the Board, in its judgment shall deem necessary or advisable. The Board may delegate its amendment authority to the
Administrator or such other persons as the Board considers appropriate. Notwithstanding the foregoing or any provision of the Plan to
the contrary, the Board (or its designee) may at any time (in its sole discretion and without the consent of any Participant) modify,
amend or terminate any or all of the provisions of this Plan or take any other action, to the extent necessary or advisable to conform
the provisions of the Plan with Section 409A of the Code, the regulations issued thereunder or an exception thereto, regardless of
whether such modification, amendment or termination of this Plan or other action shall adversely affect the rights of an Eligible
Employee or Participant under the Plan. Termination of this Plan shall not be a distribution event under the Plan unless otherwise
permitted under Section 409A.
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ARTICLE VIII
MISCELLANEOUS
8.1 Summary Plan Description.

To the extent the summary plan description or any other writing communication to an Employee conflicts with this Plan,
the Plan document shall control.
8.2 Impact on Other Benefits.
Except as otherwise provided herein, any amounts paid to a Participant under this Plan shall have no effect on the
Participant’s rights or benefits under any other employee benefit plan sponsored by the Employer; provided, however, that in no event
shall any Participant be entitled to any payment or benefit under the Plan which duplicates a payment or benefit received or receivable
by the Participant under any severance plan, policy, guideline, arrangement, agreement, letter and/or other communication, whether
formal or informal, written or oral sponsored by the Employer or an affiliate thereof and/or entered into by any representative of the
Employer and/or any affiliate thereof. Further, any such amounts shall not be used to determine eligibility for or the amount of any
benefit under any employee benefit plan, policy, or arrangement sponsored by the Employer or any affiliate thereof.
8.3 Tax Withholding.
The Employer shall have the right to withhold from any benefits payable under the Plan or any other wages payable to a
Participant an amount sufficient to satisfy federal, state and local tax withholding requirements, if any, arising from or in connection
with the Participant’s receipt of benefits under the Plan.
8.4 No Employment or Service Rights.

Nothing contained in the Plan shall confer upon any Employee any right with respect to continued employment with the
Employer, nor shall the Plan interfere in any way with the right of the Employer to at any time reassign an Employee to a different
job, change the compensation of the Employee or terminate the Employee’s employment for any reason.
8.5 Nontransferability.
Notwithstanding any other provision of this Plan to the contrary, the benefits payable under the Plan may not be subject to
voluntary or involuntary anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, attachment or garnishment by
creditors of the Participant or such other person, other than pursuant to the laws of descent and distribution, without the consent of the
Company.
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8.6 Successors.
The Company and its affiliates shall require any successor (whether direct or indirect, by purchase, merger, consolidation
or otherwise) to all or substantially all of the business or assets of the Company and its affiliates (taken as a whole) expressly to
assume and agree to perform under the terms of the Plan in the same manner and to the same extent that the Company and its
affiliates would be required to perform it if no such succession had taken place (provided that such a requirement to perform which
arises by operation of law shall be deemed to satisfy the requirements for such an express assumption and agreement), and in such
event the Company and its affiliates (as constituted prior to such succession) shall have no further obligation under or with respect to
the Plan.
8.7 Governing Law.

Except as otherwise preempted by the laws of the United States, this Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to its conflict of law provisions. If any provision of this Plan
shall be held illegal or invalid for any reason, such determination shall not affect the remaining provisions of this Plan.
This amendment and restatement of The AES Corporation Severance Plan has been duly executed by the undersigned and is
effective this 31 day of December 2010.
The AES Corporation
By: /s/ Rita Trehan

Rita Trehan, Vice President
Human Resources
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BENEFITS SCHEDULE
Severance Benefits
Title/Grade Classification (Min. 1 Year-of-Service for Eligibility)
Executive Officers One (1) times (Annual Compensation + Bonus) (Section 4.1)
(CEO, CFO, COO Health Benefits (Section 4.2)
excluded because of Outplacement Benefits (Section 4.3) Prorated Bonus (Section 4.4)
contracts) Special Enhanced Benefits (Section 4.5)
Excise Tax Reimbursement (see Appendix A for specific participant eligibility)
Grades 24 -27 One (1) times (Annual Compensation) (Section 4.1)
Health Benefits (Section 4.2)
Outplacement Benefits (Section 4.3) Prorated Bonus (Section 4.4)
Special Enhanced Benefits (Section 4.5)
Grades 19 -23 Three (3) months prorated Annual Compensation plus two (2) Weeks’ Compensation for each Year-of-
Service up to a maximum of thirty-nine (39) Week’s Compensation (Section 4.1)
Grades 18 and below Two (2) months prorated Annual Compensation plus two (2) Weeks’ Compensation for each Year-of-
Service up to a maximum of twenty-six (26) Week’s Compensation (Section 4.1)
1
THE AES CORPORATION SEVERANCE PLAN
List of Participating Employers
[The Administrator is required to maintain a list of Participating Employers]*
* Individuals employed by Indianapolis Power & Light Company and its subsidiaries and (ii) Ineligible Employees shall not be
(i) eligible to participate in the Plan.
-1-
Exhibit 12
The AES Corporation and Subsidiaries
Statement Re: Calculation of Ratio of Earnings to Fixed Charges
(in millions, unaudited)
2010 2009 2008 2007 2006
Actual:
Computation of earnings:
Income from continuing operations before income taxes and equity in
earnings of affiliates $ 1,044 $ 2,316 $ 2,667 $ 1,414 $ 827
Fixed charges 1,795 1,769 2,055 1,922 1,884
Amortization of capitalized interest 53 37 34 17 17
Distributed income of equity investees 14 68 183 21 19
Less:
Capitalized interest (193) (187) (176) (86) (50)
Preference security dividend of consolidated subsidiary (5) (4) (4) (6) (5)
Noncontrolling interests in pretax income of subsidiaries that have
not incurred fixed changes(1) (4) (8) — — —
Earnings $ 2,704 $ 3,991 $ 4,759 $ 3,282 $ 2,692
Fixed charges:
Interest expense, debt premium and discount amortization $ 1,565 $ 1,545 $ 1,841 $ 1,788 $ 1,769
Capitalized interest 193 187 176 86 50
Interest expense included in rental expense 32 33 34 42 60
Preference security dividend of consolidated subsidiary 5 4 4 6 5
Fixed charges $ 1,795 $ 1,769 $ 2,055 $ 1,922 $ 1,884
Ratio of earnings to fixed charges 1.51 2.26 2.32 1.71 1.43
(1)
Amounts for prior periods have been restated to exclude from the computation of earnings only noncontrolling interests in pretax
income of those subsidiaries that did not incur fixed charges.
Exhibit 21
Company Name Jurisdiction
3E Liniewo Sp.z o.o. Poland
AEE2, L.L.C. Delaware
AES (China) Investment Management Pte. Ltd. Singapore
AES (China) Management Co. Ltd. China
AES (India) Private Limited India
AES (NI) Limited Northern Ireland
AES Abigail S.a.r.l. Luxembourg
AES Africa Power Company B.V. The Netherlands
AES AgriVerde (Beijing) Environmental Technology Ltd. China
AES AgriVerde Holdings Cooperatief U.A. The Netherlands
AES AgriVerde Holdings, B.V. The Netherlands
AES AgriVerde II, Ltd. Bermuda
AES AgriVerde Limited Bermuda
AES AgriVerde Services (Malaysia) SDN BHD Malaysia
AES AgriVerde Services (RUS) Limited Liability Company Russian Federation
AES AgriVerde Services (Ukraine) Limited Liability Company Ukraine
AES AgriVerde Services (US), L.L.C. Delaware
AES Alamitos Development, Inc. Delaware
AES Alamitos, L.L.C. Delaware
AES Alicura Holdings S.C.A Argentina
AES Alternative Energy (Southeast Asia) Pte. Ltd. Singapore
AES Alternative Energy Brasil Holding Ltda. Brazil
AES Americas International Holdings, Limited Bermuda
AES Americas, Inc. Delaware
AES Amsterdam Holdings B.V. The Netherlands
AES Andes Energy, Inc. Delaware
AES Andres BV The Netherlands
AES Andres Dominicana, Ltd. Cayman Islands
AES Andres Finance, Ltd. Cayman Islands
AES Andres Holdings I, Ltd Cayman Islands
AES Andres Holdings II, Ltd. Cayman Islands
AES Angel Falls, L.L.C. Delaware
AES Anhui Power Co Pte. Ltd. Singapore
AES Anhui Power Co. Ltd. British Virgin Islands
AES Ankara Holdings B.V. The Netherlands
AES APC Holdings B.V. The Netherlands
AES Aramtermelo Holdings B.V. The Netherlands
AES Argentina Generación S.A. Argentina
AES Argentina Holdings S.C.A. Uruguay
AES Argentina Investments, Ltd. Cayman Islands
AES Argentina Operations, Ltd. Cayman Islands
AES Argentina, Inc. Delaware
AES Arlington Services, LLC Delaware
AES Armenia Mountain Holdings, LLC Delaware
AES Armenia Mountain Wind 2, LLC Delaware
AES Armenia Mountain Wind, LLC Delaware
AES Asociados S.A. Argentina
AES Athens Holdings B.V. The Netherlands
AES Aurora Holdings, Inc. Delaware
AES Aurora, Inc. Delaware
AES Austin Aps Denmark
AES Australia Retail II, Inc. Delaware
AES Australia Retail, Inc. Delaware
AES Bainbridge Holdings, LLC Delaware
AES Bainbridge, LLC Delaware
AES Ballylumford Holdings Limited England & Wales
AES Ballylumford Limited Northern Ireland
AES Baltic Holdings BV The Netherlands
AES Bandeirante, Ltd. Cayman Islands
AES Barka Holdings United Kingdom
AES Barka Partner (Cayman) Ltd. Cayman Islands
AES Barka Services 1 (Cayman) Ltd. Cayman Islands
AES Barka Services 2 (Cayman) Ltd. Cayman Islands
AES Barka Services, Inc. Delaware
AES Barry Limited United Kingdom
AES Barry Operations Ltd. United Kingdom
AES Battery Rock Holdings LNG, LLC Delaware
AES Battery Rock LNG, LLC Delaware
AES Beauvior BV The Netherlands
AES Beaver Valley, L.L.C. Delaware
AES Belfast West Power Limited Northern Ireland
AES Big Cedar Holdings, LLC Delaware
AES Big Sky, L.L.C. Delaware
AES Black Sea Holdings B.V. The Netherlands
AES Blue Tech Holdings, LLC Delaware
AES Blue Tech Unit 1, LLC Delaware
AES Bocas del Toro Hydro, S.A. Panama
AES Bohemia SRO Czech Republic
AES Borsod CFB Kft Hungary
AES Borsod Energetic Ltd. Hungary
AES Borsod Holdings Limited United Kingdom
AES Botswana Holdings B.V. The Netherlands
AES Brasil Ltda Brazil
AES Brazil International Holdings, Limited Bermuda
AES Brazil Investimento II, LLC Delaware
AES Brazil Investimento III, LLC Delaware
AES Brazil Investimento, LLC Delaware
AES Brazil, Inc. Delaware
AES Brazilian Energy Holdings II S.A. Brazil
AES Brazilian Energy Holdings Ltda. Brazil
AES Brazilian Holdings, Ltd. Cayman Islands
AES Bridge I, Ltd. Cayman Islands
AES Bridge II, Ltd. Cayman Islands
AES Bulgaria B.V. The Netherlands
AES Bulgaria Holdings BV The Netherlands
AES Bussum Holdings BV The Netherlands
AES BVI Holdings I, Inc. Delaware
AES BVI Holdings II, Inc. Delaware
AES Bytservice LLP Kazakhstan
AES C&W Africa Holdings B.V. The Netherlands
AES CAESS Distribution, Inc. Delaware
AES Calaca Pte. Ltd. Singapore
AES Calgary ULC Canada
AES Calgary, Inc. Delaware
AES California Management Co., Inc. Delaware
AES Cambridge Investments, LLC Delaware
AES Cameroon Holdings S.A. Cameroon
AES Canada Wind, LLC Delaware
AES Canada, Inc. Delaware
AES Canal Power Services, Inc. Delaware
AES Caracoles I Cayman Islands
AES Caracoles II Cayman Islands
AES Caracoles III L.P. Cayman Islands
AES Caracoles SRL Argentina
AES Carbon Exchange, Ltd. Bermuda
AES Carbon Holdings, Ltd. British Virgin Islands
AES Caribbean Finance Holdings, Inc. Delaware
AES Caribbean Investment Holdings, Ltd. Cayman Islands
AES Carly S.a.r.l. Luxembourg
AES Carolina Wind, LLC Delaware
AES Cartagena Operations, S.L Spain
AES Cartegena Holdings BV The Netherlands
AES Cayman Guaiba, Ltd. Cayman Islands
AES Cayman I Cayman Islands
AES Cayman II Cayman Islands
AES Cayman Islands Holdings, Ltd. Cayman Islands
AES Cayman Pampas, Ltd. Cayman Islands
AES Cayuga, L.L.C. Delaware
AES CC&T Holdings LLC Delaware
AES CC&T International, Ltd. British Virgin Islands
AES Cemig Empreendimentos II, Ltd. Cayman Islands
AES Cemig Empreendimentos, Inc. Cayman Islands
AES Cemig Holdings, Inc. Delaware
AES Central America Electric Light, Ltd. Cayman Islands
AES Central American Holdings, Inc. Delaware
AES Central American Investment Holdings, Ltd. Cayman Islands
AES Central American Management Services, Inc. Delaware
AES Central Asia Holdings BV The Netherlands
AES Central Valley, L.L.C. Delaware
AES Ceprano Energia SRL Italy
AES Changuinola, S.A. Panama
AES Chaparron I, Ltd Cayman Islands
AES Chaparron II, Ltd Cayman Islands
AES Chenba’erhu Wind Power Co. Pte. Ltd. Singapore
AES Chengdu Pte. Ltd. Singapore
AES Cherry Flats Wind, LLC Delaware
AES Chhatissgarh Energy Private Limited India
AES Chigen Holdings, Ltd. Cayman Islands
AES China Corp Pte. Ltd. Singapore
AES China Corp. Cayman Islands
AES China Generating Co Pte. Ltd. Singapore
AES China Generating Co. Ltd. Bermuda
AES China Holding Co Pte. Ltd. Singapore
AES China Holding Company (L) Ltd. Malaysia
AES China Hydropower Investment Co. Pte. Ltd. Singapore
AES Chivor & Cia S.C.A. E.S.P. Colombia
AES Chivor S.A. Colombia
AES CLESA Electricidad, S.A. de C.V. El Salvador
AES CLESA Y Compania, Sociedad en Comandita de Capital Variable San Salvador
AES Climate Services, LLC Delaware
AES Climate Solutions (India) Private Ltd. India
AES Climate Solutions Holdings I B.V. The Netherlands
AES Climate Solutions Holdings I, LLC Delaware
AES Climate Solutions Holdings II B.V. The Netherlands
AES Climate Solutions Holdings II, LLC Delaware
AES Climate Solutions Holdings, L.P. Bermuda
AES Climate Solutions Holdings, LLC Delaware
AES Columbia Power, LLC Delaware
AES Communications Bolivia S.A. Bolivia
AES Communications Latin America, Inc. Delaware
AES Communications Rio de Janeiro SA. Brazil
AES Communications, Ltd. Cayman Islands
AES Connecticut Management, L.L.C. Delaware
AES Coral Reef, LLC Cayman Islands
AES Coral, Inc. Delaware
AES Costa Rica Energy SRL Costa Rica
AES Costa Rica Holdings, Ltd. Cayman Islands
AES Creative Resources, L.P. Delaware
AES Deepwater, Inc. Delaware
AES Denmark GP Holding I Aps Denmark
AES Denmark GP Holding II ApS Denmark
AES Desert Power, L.L.C. Delaware
AES Development de Argentina S.A. Argentina
AES Devin Co Ireland
AES Dibamba Holdings B.V. Netherlands
AES Disaster Relief Fund Virginia
AES Distribuidores Salvadorenos Limitada San Salvador
AES Distribuidores Salvadorenos Y Campania S en C de C.V. San Salvador
AES Dominicana Energia Finance, S.A. Cayman Islands
AES Dominicana Transportadora De Gas, Ltd. Cayman Islands
AES Dordrecht Holdings BV The Netherlands
AES DR Holdings, Ltd. Cayman Islands
AES Drax Financing, Inc. Delaware
AES Drax Power Finance Holdings Limited United Kingdom
AES Eamon Theadore Holding, Inc. Delaware
AES East Usk Limited United Kingdom
AES Eastern Energy, L.P. Delaware
AES Eastern Wind, L.L.C. Delaware
AES Ebute Holdings, Ltd. Cayman Islands
AES Ecotek Corporation Delaware
AES Ecotek Europe Holdings B.V. The Netherlands
AES Ecotek Holdings, L.L.C. Delaware
AES Ecotek International Holdings, Inc. Cayman Islands
AES EDC Funding II, L.L.C. Delaware
AES EDC Holding II, LLC Delaware
AES EDC Holding, L.L.C. Delaware
AES Edelap Funding Corporation, L.L.C. Delaware
AES EEO Distribution, Inc. Delaware
AES El Faro Electric Light, Ltd. Cayman Islands
AES El Faro Generating, Ltd. Cayman Islands
AES El Faro Generation, Inc. Delaware
AES El Salvador Distribution Ventures, Ltd. Cayman Islands
AES El Salvador Electric Light, Ltd. Cayman Islands
AES El Salvador Services Holding Ltda. de C.V. El Salvador
AES El Salvador, Ltd. Cayman Islands
AES El Salvador, S.A. de C.V. El Salvador
AES Electric Ltd. United Kingdom
AES Electroinversora Espana S.L. Spain
AES Eletrolight, Ltd. Cayman Islands
AES Elpa S.A. Brazil
AES Elsta BV The Netherlands
AES Empresa Electrica de El Salvador Limitada de Capital Variable El Salvador
AES Endeavor, Inc. Delaware
AES Energia Cartagena, S.R.L. Spain
AES Energia I, Ltd. Cayman Islands
AES Energia II, Ltd. Cayman Islands
AES Energia SRL Italy
AES Energoline LLC Ukraine
AES Energy and Natural Resources, L.L.C. Delaware
AES Energy Developments (Pty) Ltd. Republic of South Africa
AES Energy Developments, S.L. Spain
AES Energy Ltd. United Kingdom
AES Energy Services Inc. Ontario
AES Energy Storage Holdings, LLC Delaware
AES Energy Storage, LLC Delaware
AES Energy, Ltd. Bermuda
AES Energy, Ltd. (Argentina Branch) Argentina
AES Enerji Limited Sirketi Turkey
AES Engineering (Vietnam) Limited Liability Company Vietnam
AES Engineering, LLC Delaware
AES Engineering, Ltd. Cayman Islands
AES ES Deepwater, LLC Delaware
AES ES Westover Holdings, LLC Delaware
AES ES Westover, LLC Delaware
AES Esti Panama Holding, Ltd. Cayman Islands
AES Eurasia Enerji Yatirimlari Limited Sirketi Turkey
AES Europe S.A.R.L. France
AES European Holdings BV The Netherlands
AES European Investments Cooperatief U.A. The Netherlands
AES Finance and Development, Inc. Delaware
AES Florestal Ltda. Brazil
AES Fonseca Energia Limitada de C.V. El Salvador
AES Forca Empreendimentos Ltda Brazil
AES Forca, Ltd. Cayman Islands
AES Fox Hill Wind, LLC Delaware
AES Frontier Development, Inc. Delaware
AES Gas Supply & Distribution Ltd. Cayman Islands
AES Gasification Project Holdings, LLC Delaware
AES GEH Holdings, L.L.C. Delaware
AES GEH, Inc. Delaware
AES GEI US Finance, Inc. Delaware
AES GEI, L.L.C. Delaware
AES Gener S.A. Chile
AES Geo Energy 2 OOD Bulgaria
AES GEO Energy OOD Bulgaria
AES Global African Power (Proprietary) Limited Republic of South Africa
AES Global Insurance Company Vermont
AES Global Mobility Services, LLC Delaware
AES Global Power Holdings B.V. The Netherlands
AES GPH Holdings, Inc. Delaware
AES Grand Dominicana, Ltd. Cayman Islands
AES Grand Itabo, Ltd. Cayman Islands
AES Great Britain Holdings B.V. The Netherlands
AES Great Britain Limited United Kingdom
AES Greenidge, L.L.C. Delaware
AES Grid Stability, LLC Delaware
AES GT Holding Pty Ltd Australia
AES Guaiba II Empreendimentos Ltda Brazil
AES Guayama Holdings BV The Netherlands
AES Hawaii Management Company, Inc. Delaware
AES Hawaii, Inc. Delaware
AES Hellas Societe Anonyme of Energy Production and Exploitation from
Renewable Sources of Energy Greece
AES Hickling, L.L.C. Delaware
AES Highgrove Holdings, L.L.C. Delaware
AES Highgrove, L.L.C. Delaware
AES Hispanola Holdings BV The Netherlands
AES Hispanola Holdings II BV The Netherlands
AES Holanda Holdings C.V. The Netherlands
AES Holdings Brasil Ltda. Brazil
AES Honduras Generacion, Sociedad en Comandita por Acciones de Capital
Variable Honduras
AES Honduras Generation Ventures, Ltd. Cayman Islands
AES Honduras Holdings, Ltd. Cayman Islands
AES Horizons Holdings BV The Netherlands
AES Horizons Investments Limited United Kingdom
AES Horizons Ltd. United Kingdom
AES Huanghua Pte. Ltd. Singapore
AES Hulunbeier Wind Power Co. Pte. Ltd. Singapore
AES Hungary Energiaszolgáltató Kft. Hungary
AES Huntington Beach Development, L.L.C. Delaware
AES Huntington Beach, L.L.C. Delaware
AES IA UAE, Ltd. Cayman Islands
AES IB Valley Corporation India
AES- IC Ictas Elektrik Toptan Satis ve Ticaret A.S. Turkey
AES- IC Ictas Enerji Uretim ve Ticaret A.S. Turkey
AES India Holdings (Mauritius) Mauritius
AES India, L.L.C. Delaware
AES Indian Queens Holdings Limited United Kingdom
AES Indiana Holdings, L.L.C. Delaware
AES Indus (Private) Limited Pakistan
AES Infoenergy Ltda. Brazil
AES Intercon II, Ltd. Cayman Islands
AES Interenergy, Ltd. Cayman Islands
AES International Holdings II, Ltd. British Virgin Islands
AES International Holdings III, Ltd. British Virgin Islands
AES International Holdings, Ltd. British Virgin Islands
AES Ironwood, Inc. Delaware
AES Ironwood, L.L.C. Delaware
AES Isabella Holdings, Inc. Delaware
AES Istanbul Holdings B.V. The Netherlands
AES Isthmus Energy, S.A. Panama
AES Italia S.r.l Italy
AES Jennison, L.L.C. Delaware
AES Jordan Holdco Cayman Limited Cayman Islands
AES Jordan Holdco, Ltd. Cayman Islands
AES Jordan IMCO, Ltd. Cayman Islands
AES Jordan PSC Jordan
AES K2 Limited United Kingdom
AES Kalaeloa Venture, L.L.C. Delaware
AES Kansas Wind, LLC Delaware
AES Kelanitissa (Private) Limited Sri Lanka
AES Kelanitissa Services, Ltd. Cayman Islands
AES Keystone Wind, L.L.C. Delaware
AES Keystone, L.L.C. Delaware
AES Khanya - Kwazulu Natal (Proprietary) Limited South Africa
AES Khanya - Port Elizabeth (Pty) Ltd. Republic of South Africa
AES Kienke Holdings B.V. The Netherlands
AES Kilroot Generating Limited Northern Ireland
AES Kilroot Power Limited Northern Ireland
AES King Harbor, Inc. Delaware
AES Kingston Holdings B.V. The Netherlands
AES Kribi Holdings B.V. The Netherlands
AES Lal Pir (UK) Ltd. United Kingdom
AES Landfill Carbon, Ltd. British Virgin Islands
AES LATAM Energy Development Ltd. Cayman Islands
AES Latin America S. de R.L. Panama
AES Latin American Development, Ltd. Cayman Islands
AES Laurel Mountain, LLC Delaware
AES Lion Telecom Investments B.V. The Netherlands
AES LNG Holding II, Ltd. Cayman Islands
AES LNG Holding III, Ltd. Cayman Islands
AES LNG Holding IV, Ltd. Cayman Islands
AES LNG Holding, Ltd. Cayman Islands
AES LNG Marketing, L.L.C. Delaware
AES London Holdings B.V. The Netherlands
AES Loyalist ULC Canada
AES LTC Transition, L.L.C. Delaware
AES Maastricht Holdings B.V. The Netherlands
AES Maritza East 1 Ltd. Bulgaria
AES Maritza East 1 Services Ltd. Cyprus
AES Maritza East 1 Services Ltd. Bulgaria
AES Masinloc Pte. Ltd. Singapore
AES Mayan Holdings, S. de R.L. de C.V. Mexico
AES Medway Electric Limited United Kingdom
AES Mendips Limited England & Wales
AES Merida B.V. The Netherlands
AES Merida III, S. de R.L. de C.V. Mexico
AES Merida Management Services, S. de R.L. de C.V. Mexico
AES Merida Operaciones SRL de CV Mexico
AES Mexican Holdings, Ltd. Cayman Islands
AES Mexico Development, S. de R.L. de C.V. Mexico
AES Mexico Farms, L.L.C. Delaware
AES MicroPlanet, Ltd. British Virgin Islands
AES Mid East Holdings 2, Ltd. Cayman Islands
AES Mid-Atlantic LNG Marketing, LLC Delaware
AES Middelzee Holding B.V. The Netherlands
AES Middle East Holdco Ltd. Cayman Islands
AES Mid-West Holdings, L.L.C. Delaware
AES Mid-West Wind, L.L.C. Delaware
AES Minas PCH Ltda Brazil
AES Mobile Power Holdings, LLC Delaware
AES Mobile Power, LLC Delaware
AES Mong Duong Holdings B.V. The Netherlands
AES Monroe Holdings B.V. The Netherlands
AES Mont Blanc Holdings B.V. The Netherlands
AES Mount Vernon B.V. The Netherlands
AES NA Central, L.L.C. Delaware
AES Nejapa Gas Ltda. de C.V. El Salvador
AES Nejapa Services Ltda. de C.V. El Salvador
AES Netherlands Holdings B.V. The Netherlands
AES New Creek, LLC Delaware
AES New Hampshire Biomass, Inc. New Hampshire
AES New York Capital, L.L.C. Delaware
AES New York Equity, LLC Delaware
AES New York Funding, L.L.C. Delaware
AES New York Holdings, L.L.C. Delaware
AES New York Renewable Energy Co., L.L.C. Delaware
AES New York Surety, L.L.C. Delaware
AES New York Wind, L.L.C. Delaware
AES Nigeria Barge Limited Nigeria
AES Nigeria Barge Operations Holdings I Cayman Islands
AES Nigeria Barge Operations Holdings II Cayman Islands
AES Nigeria Barge Operations Limited Nigeria
AES Nigeria Holdings, Ltd. Cayman Islands
AES Nile Power Finance (Uganda) Limited Uganda
AES Nile Power Holdings Ltd. Guernsey
AES Nile Power Ltd. Uganda
AES Normandy Holdings B.V. The Netherlands
AES North America Development, LLC Delaware
AES North America Hydro, LLC Delaware
AES North America Pacific Group SGA, LLC Delaware
AES Northern Sea Holdings B.V. The Netherlands
AES NY, L.L.C. Delaware
AES NY2, L.L.C. Delaware
AES NY3, L.L.C. Delaware
AES Oasis Energy, Inc. Delaware
AES Oasis Finco, Inc. Delaware
AES Oasis Holdco (Cayman) Ltd. Cayman Islands
AES Oasis Holdco, Inc. Delaware
AES Oasis Ltd. Cayman Islands
AES Oasis Mauritius Inc Mauritius
AES Oasis Private Ltd. Singapore
AES Ocean Express LLC Delaware
AES Ocean LNG, Ltd. Bahamas
AES Ocean Power, Ltd. Delaware
AES Ocean Springs Trust Deed Cayman Islands
AES Ocean Springs, Ltd. Cayman Islands
AES Odyssey, L.L.C. Delaware
AES Oklahoma Holdings, L.L.C. Delaware
AES Oklahoma Management Co., LLC Delaware
AES Oman Holdings, Ltd. Cayman Islands
AES Ontario Holdings 1 BV The Netherlands
AES Ontario Holdings 2 BV The Netherlands
AES Operadora S.A Argentina
AES OPGC Holding Mauritius
AES Orient, Inc. Delaware
AES Orissa Distribution Private Limited India
AES Overseas Holdings (Cayman) Ltd. Cayman Islands
AES Overseas Holdings Limited United Kingdom
AES Pacific Ocean Holdings B.V. The Netherlands
AES Pacific, Inc. Delaware
AES Pacific, L.L.C. Delaware
AES Pak Gen (UK) Ltd. United Kingdom
AES Pak Gen Holdings, Inc. Mauritius
AES Pak Holdings, Ltd. British Virgin Islands
AES Pakistan (Holdings) Limited United Kingdom
AES Pakistan (Pvt) Ltd. Pakistan
AES Pakistan Holdco Ltd. Cayman Islands
AES Pakistan Holdings Mauritius
AES Pakistan Operations, Ltd. Delaware
AES Pakistan Power Holdings Ltd. Cayman Islands
AES Pampa Energy, S.A. Argentina
AES Panama Energy, S.A. Panama
AES Panama Holding, Ltd. Cayman Islands
AES Panama Hydro Holdings, Ltd. Cayman Islands
AES Panama, S.A. Panama
AES Parana Gas S.A. Argentina
AES Parana Generation Holdings, Ltd. Cayman Islands
AES Parana Holdings, Ltd. Cayman Islands
AES Parana I Limited Partnership Cayman Islands
AES Parana IHC, Ltd. Cayman Islands
AES Parana II Limited Partnership Cayman Islands
AES Parana Operations S.R.L. Argentina
AES Parana Propiedades S.A Argentina
AES Parana Uruguay S.R.L Uruguay
AES Pardo Holdings, Ltd. Cayman Islands
AES Pasadena, Inc. Delaware
AES Patliputra Energy Private Limited India
AES Penobscot Mountain, LLC Delaware
AES Peru S.R.L. Peru
AES Phil Investment Pte. Ltd. Singapore
AES Philippine Holdings BV The Netherlands
AES Philippines Inc. Philippines
AES Philippines Power Partners Co. Ltd. Philippines
AES Pirin Holdings, Ltd. Cayman Islands
AES PJM Wind, LLC Delaware
AES Placerita, Incorporated Delaware
AES Platense Investments Uruguay S.C.A Uruguay
AES Poland Wind Gdansk Holdings Sp.z o.o. Poland
AES Poland Wind II Holdings Sp.z o.o. Poland
AES Poland Wind Sp.z o.o. Poland
AES Polish Wind Holdings B.V. The Netherlands
AES Power Holding, Ltd. Cayman Islands
AES Power One Pty Ltd. Australia
AES Prachinburi Holdings B.V. The Netherlands
AES Prescott, L.L.C. Delaware
AES Puerto Rico Services, Inc. Delaware
AES Puerto Rico, Inc. Cayman Islands
AES Puerto Rico, L.P. Delaware
AES Qatar Holdings Cayman, Ltd. Cayman Islands
AES Qatar Holdings Ltd. Cayman Islands
AES Qatrana Holdco Limited Cayman Islands
AES Ras Laffan Services I, Ltd. Cayman Islands
AES Ras Laffan Services II, Ltd. Cayman Islands
AES Red Oak Urban Renewal Corporation New Jersey
AES Red Oak, Inc. Delaware
AES Red Oak, L.L.C. Delaware
AES Redondo Beach, L.L.C. Delaware
AES RES-Greek Holdings I B.V. The Netherlands
AES RES-Greek Holdings II B.V. The Netherlands
AES Rio Diamante, Inc. Delaware
AES Rio PCH Ltda. Brazil
AES Riverside Holdings, LLC Delaware
AES Romenergia SRL Romania
AES Ruzgar Enerjisi Limited Sirketi Turkey
AES Saint Petersburg Holdings B.V. The Netherlands
AES San Nicolas Holding Espana, S.L. Spain
AES San Nicolas, Inc. Delaware
AES Santa Ana, Ltd. Cayman Islands
AES Santa Branca II, Ltd. Cayman Islands
AES Santa Branca, Ltd. Cayman Islands
AES Santo Domingo I, Ltd. Cayman Islands
AES Santo Domingo II, Ltd. Cayman Islands
AES Saurashtra Windfarms Private Limited India
AES Sayreville, L.L.C. Delaware
AES SEB Holdings, Ltd. Cayman Islands
AES Services Philippines Inc. Philippines
AES Services, Inc. Delaware
AES Services, Ltd. Cayman Islands
AES Servicios America S.R. L. Argentina
AES Servicios Electricos Limitada de Capital Variable El Salvador
AES Servicios Electricos Y Compania Sociedad en Comandita de Capital El Salvador
Variable
AES Servicios Electricos, S. de R.L. de C.V. Mexico
AES Shady Point 2, LLC Delaware
AES Shady Point, LLC Delaware
AES Shannon Holdings BV The Netherlands
AES Shigis Energy LLP Kazakhstan
AES Shulbinsk GES LLP Kazakhstan
AES Silk Road Energy LLC Russia
AES Silk Road Trading BV The Netherlands
AES Silk Road, Inc. Delaware
AES Sirocco Limited United Kingdom
AES Snowy Creek, LLC Delaware
AES Sogrinsk TETS LLP Kazakhstan
AES Solar Energy B.V. The Netherlands
AES Solar Energy Holdings B.V. The Netherlands
AES Solar Energy, LLC Delaware
AES Solar Energy, Ltd. Cayman Islands
AES Solar Espana, S.L. Spain
AES Solar Holdings, LLC Delaware
AES Solar Management, Inc. Delaware
AES Solar Power, LLC Delaware
AES Sole Italia S.r.L. Italy
AES Solutions, LLC Delaware
AES Somerset 2 Holdings, LLC Delaware
AES Somerset 2, LLC Delaware
AES Somerset, L.L.C. Delaware
AES SONEL S.A. Cameroon
AES Songas Holdings, Ltd. Cayman Islands
AES South Africa Peakers Holdings (Proprietary) Limited South Africa
AES South American Holdings, Ltd. Cayman Islands
AES South Point, Ltd. Cayman Islands
AES Southern Europe Holdings B.V. The Netherlands
AES Southland Funding, L.L.C. Delaware
AES Southland Holdings, L.L.C. Delaware
AES Southland, L.L.C. Delaware
AES Spanish Holdings, S.R.L. Spain
AES Sparrows Point Holdings, LLC Delaware
AES Sparrows Point LNG, LLC Delaware
AES Sparta Holdings, B.V. The Netherlands
AES Stonehaven Holding, Inc. Delaware
AES Strategic Equipment Holdings Corporation Delaware
AES Sul Distribuidora Gaucha de Energia S.A. Brazil
AES Sul, L.L.C. Delaware
AES Summit Generation Ltd. United Kingdom
AES Swiss Lake Holdings B.V. The Netherlands
AES Tamuin Development Services S. de R.L. de C.V. Mexico
AES Tanzania Holdings, Ltd. Cayman Islands
AES Teal Holding, Inc. Delaware
AES Technologies Holdings, LLC Delaware
AES Technology Holdings, LLC Delaware
AES TEG Holdings I, LLC Delaware
AES TEG Holdings, LLC Delaware
AES TEG II Mexican Holdings, S. de R.L. de C.V. Mexico
AES TEG II Mexican Investments, S. de R.L. de C.V. Mexico
AES TEG II Operations, S. de R.L. de C.V. Mexico
AES TEG Management, Inc. Delaware
AES TEG Mexican Holdings, S. de R.L. de C.V. Mexico
AES TEG Mexican Investments S. de R.L. de C.V. Mexico
AES TEG Operations, S. de R.L. de C.V. Mexico
AES TEG Power Investments B.V. The Netherlands
AES TEG Power Investments II B.V. The Netherlands
AES TEGTEP Holdings B.V. The Netherlands
AES TEGTEP Treasury Holdings B.V. The Netherlands
AES Tehachapi Wind, LLC Delaware
AES TEP Holdings I, LLC Delaware
AES TEP Holdings, LLC Delaware
AES TEP Management, Inc. Delaware
AES TEP Power II Investments Limited United Kingdom
AES TEP Power Investments Limited United Kingdom
AES Termosul Empreendimentos Ltda Brazil
AES Termosul I, Ltd. Cayman Islands
AES Termosul II, Ltd. Cayman Islands
AES Terneuzen Holdings B.V. The Netherlands
AES Terneuzen Management Services BV The Netherlands
AES Tesoreria I S. de R.L. de C.V. Mexico
AES Tesoreria II S. de R.L. de C.V. Mexico
AES Texas Funding III, L.L.C. Delaware
AES Texas Wind Holdings, LLC Delaware
AES Thames, L.L.C. Delaware
AES Thomas Holdings BV The Netherlands
AES Tian Fu Power Co Pte. Ltd. Singapore
AES Tian Fu Power Company (L) Ltd. Malaysia
AES Tian Fu Power Company Ltd. British Virgin Islands
AES Tiete Holdings, Ltd. Cayman Islands
AES Tiete S.A. Brazil
AES Tisza Holdings BV The Netherlands
AES Tiszapalkonya Villamosipari Termelő és Szolgáltató Korlátolt Hungary
Felelősségű Társaság
AES Trade I, Ltd. Cayman Islands
AES Trade II, Ltd. Cayman Islands
AES Transatlantic Holdings B.V. The Netherlands
AES Transgas I, Ltd. Cayman Islands
AES Transgas II, Ltd. Cayman Islands
AES Transmisores Salvadorenos Y Compania, Sociedad en Comandita de El Salvador
Capital Variable
AES Transmisores Salvadorenos, Ltda. de C.V. El Salvador
AES Transmission Holdings, LLC Delaware
AES Transpower Australia Pty Ltd. Australia
AES Transpower Private Ltd. Singapore
AES Transpower, Inc. Mauritius
AES Transpower, Inc. Delaware
AES Treasure Cove, Ltd. Cayman Islands
AES Trinidad Services Unlimited Trinidad and Tobago
AES Trust III Delaware
AES Trust IV Delaware
AES Trust V Delaware
AES Trust VIII Delaware
AES U&K Holdings B.V. The Netherlands
AES U.S. Solar, LLC Delaware
AES UCH Holdings (Cayman) Ltd. Cayman Islands
AES UCH Holdings, Ltd. Cayman Islands
AES UK Datacenter Services Limited United Kingdom
AES UK Holdings Limited United Kingdom
AES UK Power Financing II Ltd United Kingdom
AES UK Power Financing Limited United Kingdom
AES UK Power Holdings Limited United Kingdom
AES UK Power Limited United Kingdom
AES UK Power, L.L.C. Delaware
AES Union de Negocios, S.A. de C.V. El Salvador
AES Uruguaiana Empreendimentos S.A. Brazil
AES Uruguaiana, Inc. Cayman Islands
AES US Wind Development, L.L.C. Delaware
AES Ust-Kamenogorsk GES LLP Kazakhstan
AES Ust-Kamenogorsk TETS JSC Kazakhstan
AES Venezuela Finance United Kingdom
AES VFL Holdings, L.L.C. Delaware
AES Warrior Run Funding, L.L.C. Delaware
AES Warrior Run, L.L.C. Delaware
AES Washington Holdings BV The Netherlands
AES Western Maryland Management, L.L.C. Delaware
AES Western Power Holdings, L.L.C. Delaware
AES Western Power, L.L.C. Delaware
AES Western Wind MV Acquisition, LLC Delaware
AES Western Wind, L.L.C. Delaware
AES Westover, L.L.C. Delaware
AES White Cliffs B.V. The Netherlands
AES William Holding, Inc. Delaware
AES Wilson Creek Wind, LLC Delaware
AES Wind Bulgaria EOOD Bulgaria
AES Wind Development Bulgaria EOOD Bulgaria
AES Wind France HoldCo France
AES Wind France SAS France
AES Wind Generation Asset Management Services Limited United Kingdom
AES Wind Generation, LLC Delaware
AES Wind Investments I B.V. The Netherlands
AES Wind Investments II B.V. The Netherlands
AES Wind, L.L.C. Delaware
AES WR Limited Partnership Delaware
AES Xinba’erhu Wind Power Co. Pte. Ltd. Singapore
AES Youchou Hydropower Co. Pte. Ltd. Singapore
AES Yucatan, S. de R.L. de C.V. Mexico
AES ZEG Holdings B.V. The Netherlands
AES Zephyr 2, LLC Delaware
AES Zephyr 4, L.L.C. Delaware
AES Zephyr, Inc. Delaware
AES-3C Maritza East 1 Ltd. Bulgaria
AES-3C Maritza East 1 Ltd. Cyprus
AES-Acciona Energy NY, LLC Delaware
AESCom Sul Ltda. Brazil
AESEBA Trust Deed Cayman Islands
AES-R.E. Services Energy Investment Management Hellas EPE Greece
AES-Tisza Erõmû KFT Hungary
AES-VCM Mong Duong Power Company Vietnam
AESWapiti Energy Corporation British Columbia
AgCert Canada Co. Canada
AgCert Canada Holding, Limited Ireland
AgCert Chile Servicios Ambientales Limitada Chile
AgCert do Brasil Soluções Ambientais Ltda. Brazil
AgCert International, Limited Ireland
AgCert Mexico Servicios Ambientales, Sociedade de Responsibilidad Mexico
Limitada de Capital Variable
AgCert Services (USA), Inc. Delaware
AgCert Servicios Ambientales S.R.L. Argentina
Aggregate Holdings, Ltd. Cayman Islands
ALBERICH Beteiligungsverwaltungs GmbH Austria
Alpha Water and Realty Services Corp. Philippines
Altai Power Limited Liability Partnership Kazakhstan
Anhui Liyuan - AES Power Co., Ltd. China
Ankares Enerji Uretim Ltd. Sti. Turkey
ANTURIE Beteiligungsverwaltungs GmbH Austria
ARNIKA Beteiligungsverwaltungs GmbH Austria
Asia Alternative Energy Development Limited Hong Kong
Asociados de Electricidad S.A. Argentina
Atlantic Basin Services, Ltd. Cayman Islands
B.A. Services S.R.L. Argentina
Blyton Airfield Wind Farm Limited England & Wales
Bright Orient Group Ltd British Virgin Islands
Buffalo Gap Holdings 2, LLC Delaware
Buffalo Gap Holdings 3, L.L.C. Delaware
Buffalo Gap Holdings 4, L.L.C. Delaware
Buffalo Gap Holdings, LLC Delaware
Buffalo Gap Wind Farm 2, LLC Delaware
Buffalo Gap Wind Farm 3, L.L.C. Delaware
Buffalo Gap Wind Farm 4, L.L.C. Delaware
Buffalo Gap Wind Farm, LLC Delaware
Camille Trust Cayman Islands
Camille, Ltd. Cayman Islands
Cavanal Minerals, LLC Delaware
Cayman Energy Traders Cayman Islands
CCS Telecarrier Cayman Islands
CDEC-SIC LTDA Chile
CDEC-SING Ltda Chile
Cenay Elektrik Uretim Insaat Sanayi ve Ticaret Ltd. Sti. Turkey
Central Dique, S.A. Argentina
Central Electricity Supply Company of Orissa Limited India
Chengdu AES Kaihua Gas Turbine Power Co. Ltd. China
China Hydropower Development Limited British Virgin Islands
Chongqing Dongjiang Songzao Renewable Energy Development Co., Ltd. China
Chongqing Global Water and Electricity Development Co., Ltd
CIA.TRANSMISORA DEL NORTE CHICO S.A. Chile
CJSC AES Kyivblenergo Ukraine
CJSC AES Rivneenergo Ukraine
Clean Wind Energy Ltd. Israel
Climate Solutions (Asia) Limited Hong Kong
Cloghan Limited Northern Ireland
Cloghan Point Holdings Limited Northern Ireland
CMS Generation San Nicolas Company Michigan
Coastal Itabo, Ltd. Cayman Islands
Coastal Power Dominicana Generation, Ltd. Cayman Islands
Coastal Power Guatemala, Ltd. Cayman Islands
Companhia Brasiliana de Energia Brazil
Companhia Energetica de Minas Gerais Brazil
Compania de Alumbrado Eletrico de San Salvador, S.A. DE C.V. El Salvador
Compania de Inversiones en Electricidad, S.A. Argentina
Condon Wind Power, LLC Delaware
Daggett Ridge Wind Farm, LLC Delaware
Daglar Enerji Elektrik Uretim A.S. Turkey
Dibamba Power Development Company Cameroon
Distribuidora Electrica de Usulutan, Sociedad Anonima de Capital Variable El Salvador
Dominican Power Partners Cayman Islands
DostykEnergo Limited Liability Partnership Kazakhstan
Drone Hill Wind Farm Limited Scotland
Ebbw Vale Wind Farm Limited England & Wales
Ecotek Newco Corporation Delaware
EDC Network Communications, SCS Venezuela
Eden Village Produce Limited Northern Ireland
El Salvador Energy Holdings Cayman Islands
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A. Brazil
Eletropaulo Telecomunicacoes Ltda. Brazil
Elsta BV The Netherlands
Elsta BV & Co. CV The Netherlands
EMD Ventures BV The Netherlands
Empresa Distribuidora de Energia Sur S.A. Argentina
Empresa Distribuidora La Plata, S.A. Argentina
Empresa Electrica Angamos S.A. Chile
Empresa Electrica Campiche S.A. Chile
Empresa Electrica Cochrane S.A. Chile
Empresa Electrica de Oriente, S.A. de C.V. El Salvador
Empresa Electrica Guacolda S.A. Chile
Empresa Electrica Ventanas S.A. Chile
Empresa Generadora De Electricidad Itabo, S.A. Dominican Republic
Empresa Salvadoreña de Energia, S.A. de C.V. El Salvador
ENERGEN S.A. Argentina
Energia Verde S.A. Chile
Energia y Servicios de El Salvador, S.A. De C.V. El Salvador
Energocompany LLP Kazakhstan
Energy Trade and Finance Corporation Cayman Islands
Eviva-Lebork Sp.z o.o. Poland
Eviva-Waitrowo Sp.z o.o. Poland
Evrensel Enerji Uretim Limited Sirketi Turkey
EW Rywald Sp.z o.o. Poland
Ferme Eolienne Saint Patrick SAS France
Foote Creek V, LLC Delaware
Gasoducto GasAndes Argentina S.A. Argentina
Gasoducto GasAndes S.A. Chile
Gener Argentina S.A. Argentina
Gener Blue Water, Ltd. Cayman Islands
Genergia Power, Ltd. Cayman Islands
GENERGIA S.A. Chile
GHGS Coal Mine Methane, LLC Delaware
GHGS Development, LLC Delaware
GHGS Offsets, LLC Delaware
Global Energy Holdings C.V. The Netherlands
Global Energy Investments CV The Netherlands
GNRY Holdings & Investments Limited Israel
Goller Enerji Uretim Ltd. Sti. Turkey
Great Wind Sp.z o.o. Poland
Greenhouse Gas Services, LLC Delaware
Guohua AES (Huanghua) Wind Power Co., Ltd. China
Haddonfield Finance Ltd. Ireland
Havza Enerji Uretim Limited Sirketi Turkey
Health and Welfare Benefit Plans LLC Delaware
Hefei Zhongli Energy Company Ltd. China
Hipotecaria San Miguel Limitada de Capital Variable San Salvador
Hipotecaria Santa Ana Limitada de Capital Variable El Salvador
Hunan Xiangci - AES Hydro Power Company Ltd. China
IC Ictas Elektrik Uretim A.S. Turkey
Indianapolis Power & Light Company Indiana
Indimento Inversiones, S.L. Spain
InnoVent S.A.S. France
Inter Wind Sp.z o.o. Poland
InterAndes, S.A. Argentina
Inversiones Cachagua Limitada Chile
Inversiones LK Limitada Chile
INVERSIONES NUEVA VENTANAS S.A. Chile
Inversiones Termoenergia de Chile Ltda. Chile
Inversiones Zapallar Limitada Chile
Inversora AES Americas Holding Espana SL Spain
Inversora AES Americas S.A. Argentina
Inversora de San Nicolas S.A. Argentina
IPALCO Enterprises, Inc. Indiana
IPL Funding Corporation Indiana
Irtysh Power & Light LLP Kazakhstan
Itabo Dominicana, Ltd. Cayman Islands
Itabo Finance, S.A. Cayman Islands
Jiaozuo (G.P.) Corporation Cayman Islands
Jiaozuo AES Wang Fang Power Company Limited China
Jiaozuo Power Partners Pte. Ltd. Singapore
Jiaozuo Power Partners, L.P. Cayman Islands
JSC AES Ust-Kamenogorsk CHP Kazakhstan
KA Energy OOD Bulgaria
Kazincbarcikai Iparteruletfejleszt Kft. Hungary
Kilroot Electric Limited Cayman Islands
Kiyi Enerji Elektrik Uretim A.S. Turkey
Knottingley Wind Farm Limited England & Wales
Kribi Power Development Company S.A. Cameroon
La Plata I Empreendimentos Ltda. Brazil
La Plata II Empreendimentos Ltda. Brazil
La Plata II, Ltd. British Virgin Islands
La Plata III, Ltd. British Virgin Islands
Lake Benton Holdings LLC Delaware
Lake Benton Power Associates LLC Delaware
Lake Benton Power Partners L.L.C. Delaware
Luz de la Plata S.A. Argentina
Magnicon BV The Netherlands
Maley Ltd. Cayman Islands
Masin-AES Pte. Ltd. Singapore
Masinloc AES Partners Company Limited Philippines
Masinloc AES Power Company Limited Philippines
Masinloc Power Partners Co. Ltd. Philippines
Mercury Cayman Co. II, Ltd. Cayman Islands
Mercury Cayman Holdco, Ltd. Cayman Islands
Mid-America Capital Resources, Inc. Indiana
Mid-Atlantic Express Holdings, L.L.C. Delaware
Mid-Atlantic Express, L.L.C. Delaware
Mountain Minerals, LLC Delaware
Mountain View Power Partners IV, LLC Delaware
Mountain View Power Partners, LLC Delaware
New Caribbean Investments S.A. Dominican Republic
Newburgh Hydro, LLC Utah
Niagara Shore Winds, LLC Delaware
Niksar Enerji Uretim Limited Sirketi Turkey
Norgener S.A. Chile
North Rim Wind, LLC Delaware
Nowa Enegia Trabki Wielkie Sp.z o.o. Poland
Nowa Energia Wind Parks Sp.z o.o. Poland
Nowa Energia Wyczechowo Sp.z o.o. Poland
Nuncia Investments BV The Netherlands
Nurenergoservice LLP Kazakhstan
Ocean LNG Holdings, Ltd. Cayman Islands
Orissa Power Generation Corporation Limited India
Ortaçağ Enerji Üretim Anonim Şirketi Turkey
ORU Ekibastuz LLP Kazakhstan
Percy Hill Wind Farm Limited England & Wales
Placerita Oil Co., Inc. Delaware
Profilaktoriy Shulbinsky LLP Kazakhstan
PT AES AgriVerde Indonesia Indonesia
PW Gardeja Sp.z o.o. Poland
Red Mountain Ridge Wind Farm, LLC Delaware
Red River Hydro, LLC Utah
Remittance Processing Services, LLC Indiana
Riverside Canal Power Company California
Sagebrush Partner Eighteen, Inc. California
Sagebrush Partner Nineteen, Inc. California
Sagebrush Partner Seventeen, Inc. California
San Jacinto Power Company Nevada
Sand Ridge Wind Farm, LLC Delaware
SeaWest Asset Management Services, LLC California
SeaWest Energy Project Associates, LLC Delaware
SeaWest Holdings, LLC Delaware
SeaWest Northwest Asset Holdings, LLC Delaware
SeaWest Power Resources, LLC California
SeaWest Properties, LLC California
SeaWest Wyoming, LLC Delaware
Selen Elektrik Uretim A.S. Turkey
Shazia S.R.L. Argentina
Sichuan Fuling Aixi Power Co. Ltd. China
Siram Investments BV The Netherlands
Sixpenny Wood Windfarm Limited England & Wales
Sociedad Electrica Santiago S.A. Chile
Somerset Railroad Corporation New York
Southern Electric Brazil Participacoes, Ltda. Brazil
Store Heat and Produce Energy, Inc. Indiana
Storm Lake II Holdings LLC Delaware
Storm Lake II Power Associates LLC Delaware
Storm Lake Power Partners II LLC Delaware
StormFisher Biogas USA, LLC Delaware
T&T Power Generation Unlimited Trinidad and Tobago
T&T Power Holdings I, SRL Barbados
T&T Power Holdings II, Ltd. Cayman Islands
Tau Power BV The Netherlands
TD Communications Holdings Cayman Islands
Tecnoma Energia Solar, S.L. Spain
Tecumseh Coal Corporation Missouri
TEG Business Trust Mexico
TEG/TEP Management, LLC Delaware
TEP Business Trust Mexico
Termik Enerji Uretim Limited Sirketi Turkey
TermoAndes S.A. Argentina
Termoelectrica del Golfo, S. de R.L. de C.V. Mexico
Termoelectrica Penoles, S. de R.L. de C.V. Mexico
Terneuzen Cogen B.V. The Netherlands
The AES Barry Foundation United Kingdom
Thermo Fuels Company, Inc. California
Tormywheel Wind Farm Limited Scotland
Trabzon Enerji Uretim ve Ticaret A.S. Turkey
Trinidad Generation Unlimited Trinidad and Tobago
Tur-Gaz Enerji Uretim Limited Sirketi Turkey
Ucharmanlar Enerji Uretim Limited Sirketi Turkey
Uniontown Hydro, LLC Utah
Ussuri Beteilingungsverwaltung GmbH Austria
Vizyon Enerji Uretim Ltd. Sti. Turkey
VPI Enterprises, Inc. California
WE (Dunan) Holdings Ltd United Kingdom
WE (Earlshaugh) Holdings Limited United Kingdom
WE (Forse) Holdings Ltd United Kingdom
WE (Glencalvie) Holdings Ltd United Kingdom
WE (Hanna) Holdings Ltd United Kingdom
WE (Hearthstanes) Holdings Ltd United Kingdom
WE (Newfield) Holdings Ltd United Kingdom
WE (North Rhins) Holdings Limited United Kingdom
WE (Services) Holdings Ltd United Kingdom
WE (South Uist) Holdings Ltd United Kingdom
WE (Toabh Dubh) Holdings Ltd United Kingdom
Wildwood Trust Cayman Islands
Wind Energy (Dunan) Limited United Kingdom
Wind Energy (Earlshaugh) Limited United Kingdom
Wind Energy (Forse) Limited United Kingdom
Wind Energy (Glencalvie) Limited United Kingdom
Wind Energy (Hanna) Limited United Kingdom
Wind Energy (Hearthstanes) Limited United Kingdom
Wind Energy (Newfield) Limited United Kingdom
Wind Energy (North Rhins) Limited United Kingdom
Wind Energy (Services) Limited United Kingdom
Wind Energy (South Uist) Limited United Kingdom
Wind Energy (Taobh Dubh) Limited United Kingdom
Wuhu Shaoda Electric Power Development Co. Ltd. China
Yangcheng International Power Generating Co. Ltd. China
Yangchun Fuyang Diesel Engine Power Co. Ltd. China
Yelvertoft Wind Farm Limited England & Wales
Yesilgaz Enerji Uretim Limited Sirketi Turkey
Your Energy Limited England & Wales
Zarnowicka Elektrownia Gazowa Sp.z o.o. Poland
Exhibit 23.1
Consent of Independent Registered Public Accounting Firm
We consent to the incorporation by reference in the following Registration Statements and in the related Prospectuses of The AES
Corporation:
(1) Registration Statements No. 33-49262, 33-44498, 333-156242, 333-26225, 333-28883, 333-30352, 333-38535, 333-57482,
333-66952, 333-66954, 333-82306, 333-83574, 333-84008, 333-97707, 333-108297, 333-112331, 333-115028, 333-
150508, 333-135128, 333-158767, and 333-166607 on Form S-8;
(2) Registration Statements No. 333-64572 and 333-161913 on Form S-3
(3) Registration Statements No. 333-38924, 333-40870, 333-44698, 333-46564, 333-37924, 333-83767, and 333-81953, 333-
46189, 333-39857, 333-15487, 333-01286 and 333-161913 on Form S-3/A, and
(4) Registration Statements No. 333-45916, 333-49644, 333-43908, 333-44845, 333-147951, 333-33283 and 333-22513 on
Form S-4/A.
of our reports dated February 25, 2011, with respect to the consolidated financial statements and schedules of The AES Corporation
and the effectiveness of internal control over financial reporting of The AES Corporation included in this Annual Report (Form 10-K)
of The AES Corporation for the year ended December 31, 2010.
/s/ Ernst & Young LLP

McLean, Virginia
February 25, 2011
Exhibit 24
The AES Corporation (the “Company”)
Power of Attorney
The undersigned, acting in the capacity or capacities stated opposite their respective names below, hereby constitute and appoint
Victoria D. Harker and Brian A. Miller and each of them severally, the attorneys-in-fact of the undersigned with full power to them
and each of them to sign for and in the name of the undersigned in the capacities indicated below the Company’s 2010 Annual Report
on Form 10-K and any and all amendments and supplements thereto. This Power of Attorney may be executed in one or more
counterparts, each of which together shall constitute one and the same instrument.
Name Title Date
/s/ Samuel W. Bodman, III Director February 18, 2011

Samuel W. Bodman, III
/s/ Paul Hanrahan Principal Executive Officer and Director February 18, 2011
Paul Hanrahan
/s/ Tarun Khanna Director February 18, 2011

Tarun Khanna
/s/ Kristina M. Johnson Director February 18, 2011

Kristina M. Johnson
/s/ John A. Koskinen Director February 18, 2011

John A. Koskinen
/s/ Philip Lader Director February 18, 2011

Philip Lader
/s/ Sandra O. Moose Director February 18, 2011

Sandra O. Moose
/s/ John B. Morse, Jr. Director February 18, 2011

John B. Morse, Jr.
/s/ Philip A. Odeen Chairman and Lead Independent Director February 18, 2011
Philip A. Odeen
/s/ Charles O. Rossotti Director February 18, 2011

Charles O. Rossotti
/s/ Sven Sandstrom Director February 18, 2011

Sven Sandstrom
Exhibit 31.1
CERTIFICATIONS
I, Paul Hanrahan, certify that:

1. I have reviewed this Form 10-K of The AES Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
Dated: February 25, 2011
/s/ Paul Hanrahan

Name: Paul Hanrahan
President and Chief Executive Officer
Exhibit 31.2
CERTIFICATIONS
I, Victoria D. Harker, certify that:

1. I have reviewed this Form 10-K of The AES Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state
a material fact necessary to make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report,
fairly present in all material respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure
controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control
over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and
have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to
be designed under our supervision, to ensure that material information relating to the registrant,
including its consolidated subsidiaries, is made known to us by others within those entities, particularly
during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial
reporting to be designed under our supervision, to provide reasonable assurance regarding the
reliability of financial reporting and the preparation of financial statements for external purposes in
accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this
report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that
occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the
case of an annual report) that has materially affected, or is reasonably likely to materially affect, the
registrant’s internal control over financial reporting.
5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal
control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board
of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over
financial reporting which are reasonably likely to adversely affect the registrant’s ability to record,
process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a
significant role in the registrant’s internal control over financial reporting.
/s/ Victoria D. Harker

Name: Victoria D. Harker
Executive Vice President and
Chief Financial Officer
Exhibit 32.1
CERTIFICATION OF PERIODIC FINANCIAL REPORTS
I, Paul Hanrahan, President and Chief Executive Officer of The AES Corporation, certify, pursuant to 18 U.S.C.
Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Form 10-K for the year ended December 31, 2010 (the “Periodic Report”) which this statement
accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) information contained in the Periodic Report fairly presents, in all material respects, the financial condition
and results of operations of The AES Corporation.
/s/ Paul Hanrahan

Paul Hanrahan
President and Chief Executive Officer
Exhibit 32.2
CERTIFICATION OF PERIODIC FINANCIAL REPORTS
I, Victoria D. Harker, Executive Vice President and Chief Financial Officer of The AES Corporation, certify,
pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:
(1) the Form 10-K for the year ended December 31, 2010 (the “Periodic Report”) which this statement
accompanies fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act
of 1934 (15 U.S.C. 78m or 78o(d)); and
(2) information contained in the Periodic Report fairly presents, in all material respects, the financial condition
and results of operations of The AES Corporation.
/s/ Victoria D. Harker

Victoria D. Harker
Executive Vice President and
Chief Financial Officer

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

The AES Corporation

4300 Wilson Boulevard Arlington, Virginia 22203

Key Lines of Business

$9.1 $7.8 $7.8

2010 2009 2008

2010 2009 2008

Our Organization and Segments

Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Argentina, Brazil, Chile, Colombia, Dominican

Revenue Gross Margin

2010 2009 2008 2010 2009 2008

Set forth below is a list of our Latin America Generation facilities:

AES Equity Year

Angamos . . . . . . . . . . . . . . . . . . . . Chile Coal 518 71% 2011

Set forth below is a list of our Latin America Utilities facilities:

Edelap . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Argentina 329,000 2,776 90% 1998

Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . U.S., Puerto Rico and Mexico

Revenue Gross Margin

2010 2009 2008 2010 2009 2008

AES Equity Year

Mérida III . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Mexico Gas 484 55% 2000

IPL’s generation facilities

AES Equity Year

IPL(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—IN Coal/Gas/Oil 3,699 100% 2001

IPL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . USA—IN 470,000 16,537 100% 2001

Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Czech Republic, Hungary, Jordan, Kazakhstan,

AES Equity Year

Bohemia . . . . . . . . . . . . . . . . . . . . . . . . . . . . Czech Republic Coal/Biomass 50 100% 2001

Generation under construction

AES Equity Expected

Maritza East(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bulgaria Coal 670 100% 2011

Countries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China, India, the Philippines and Sri Lanka

Set forth below is a list of our generation facilities in Asia:

AES Equity Year

Aixi . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Coal 51 71% 1998

Corporate and Other

Eastern Kazakhstan REC(1)(2) . . . . . . . . . . . . . . . . . . . . Kazakhstan 459,000 3,444 0%

Sonel’s generation facilities

AES Equity Year

Sonel(1) . . . . . . . . . . . . . . . . . . . . . . . Cameroon Hydro/ Diesel/Heavy Fuel Oil 936 56% 2001

Sonel’s distribution facility

Sonel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cameroon 660,484 3,345 56% 2001

AES Equity Year

Dibamba . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Cameroon Heavy Fuel Oil 86 56% 2009

Set forth below is a list of AES Wind Generation facilities:

AES Equity Year

St. Nikola . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Bulgaria Wind 156 89% 2010

(1) Joint Venture with Guohua Energy Investment Co. Ltd.

AES Wind Generation projects under construction

AES Equity Expected

Chen Qi(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . China Wind 49 49% 2011

(1) Joint Venture with Guohua Energy Investment Co. Ltd.

Revenue Property, Plant & Equipment, net

How to Contact AES and Sources of Other Information

Regulation of our Generation Businesses

Latin America and Africa

The WEM is comprised of:

Environmental Regulations. The main environmental regulations reflect the implementation of EU

Middle East & Asia

Environmental and Land Use Regulations

United States—Federal Legislation and Regulation

United States—State Legislation and Regulation